BBVA has exited the list of Global Systemically Important Banks, G-SIBs, published today by the Financial Stability Board (FSB). BBVA is predominantly a retail bank, with operations in over 30 countries and with a sound and straightforward business model. The decision is coherent with the nature of BBVA’s business model.
After exiting the list, BBVA will no longer be subject to the capital buffer requirement that applies to G-SIBs and to the Total Loss Absorbing Capacity (TLAC) regulations, a proposal that will be made public in coming days. However, BBVA remains bound to other loss absorbing capacity regulatory requirements, such as the MREL (Minimum Requirement for Own Funds and Eligible Liabilities) in Europe.
The annual list of G-SIBs determines the list of global systematically important financial institutions. Despite being a global retail bank, present in 31 countries, BBVA has a straightforward business model, with cautious risk management policies and a low-risk profile.
To be listed as a G-SIB by the FSB, an institution must exceed a quantitative threshold related to five categories (size, complexity, interconnectedness, substitutability and cross-jurisdictional). A bank can also be included based on the supervisor’s qualitative judgment. BBVA has never exceeded the quantitative threshold and whenever it has been included in the list it has been according to the supervisor’s criteria. BBVA was not included in the first list ever published, in 2011. Between 2012 and 2014, it was included in the list, from which it has now has exited.