(Adds Citi's comment)
By Huw Jones
LONDON Nov 21 Citi has joined JPMorgan
at the top of global regulators' list of systemically
important banks, replacing HSBC and meaning the U.S.
bank will have to hold extra capital from 2019 to help preserve
The group of 20 economies (G20) agreed after the 2007-09
financial crisis that top banks, whose size and complexity mean
a collapse could wreak havoc in markets, should hold extra
capital, according to the level of risk they present.
Members of the list of 30 lenders will also have to begin
holding bonds from 2019 that can be written down to help
replenish capital that is burnt through in a crisis.
In the annual update of rankings published on Monday by the
G20's Financial Stability Board (FSB), Citi has replaced HSBC in
the top "bucket" facing a 2.5 percent capital surcharge on top
of global minimum requirements.
The measure announced by the FSB does not have an impact on
any of Citi's binding regulatory metrics, the bank said in an
No lender joined or dropped out of the top 30 list this
Lenders on the list typically already meet or exceed the
amount of capital they must hold due to pressure from regulators
and markets to dispel any doubts about their resilience.
HSBC joins BNP Paribas and Deutsche Bank
in the next category down, with a surcharge of 2
percent. Bank of America rose a category to join them.
Barclays dropped a category to the 1.5 percent
surcharge group. Industrial and Commercial Bank of China
and Wells Fargo rose a category to join the
Morgan Stanley fell a category to the 1 percent
The FSB is also due to agree a higher leverage ratio for the
The ratio, a broad measure of capital to non-risk-weighted
assets, has been set at a minimum of 3 percent for all other
banks across the world.
The FSB has yet to decide if the 30 should be subject to the
same leverage ratio "surcharge" or whether it too should adopt a
The watchdog also updated its list of nine globally
systemically important insurers, which was unchanged from last
Insurers still on the list in 2017 will be required to
comply with tougher "loss absorbency" requirements from January
The list comprises Aegon, Allianz, AIG, Aviva, Axa, MetLife,
Ping An, Prudential Financial, and Prudential.
The FSB's latest list makes no mention of reinsurers, a
category still being considered for inclusion.
Global insurance regulators have said they may take into
account the activities of insurers when they decide if they are
globally systemic, rather than just focusing on size and global
MetLife, the biggest U.S. life insurer, was also designated
as systemically important by the Financial Stability Oversight
Council, made up of the heads of U.S. financial regulators.
The insurer successfully challenged the U.S. designation in
court, but the U.S. government has appealed with the outcome
generally expected sometime in the next few months.
"MetLife is no longer designated as a systemically important
financial institution in the United States, and believe we
should not be designated as a global systemically important
insurer, either," MetLife said on Monday.
(Reporting by Huw Jones; Editing by Carolyn Cohn and Mark