G20 leaders differ over systemically important banks
Group of 20 leaders meeting in Seoul are yet to agree on which global banks will be treated as "systemically important financial institutions" or SIFIs, reports overnight suggest.The Basel III regulator regime to be broadly agreed to by the G20 leaders creates tougher rules for these SIFIs, requiring them to hold more capital or raise "contingent capital". Institutions caught by the rules are expected to include giants like UBS, Citibank, RBS, Credit Suisse and Deutsche Bank. The tougher rules mean institutions do not want to be caught by the SIFI net.Reuters yesterday reported Basel Committee chair Nout Wellink as saying regulators were still drawing up the list of SIFIS and it would be ready "by the end of this year". The list of banks would be based on their links with other players in the financial system and on "multilateral relations". Banks on the list could not take each other over, Wellink was reported as saying.Banking Day reported yesterday that the package to be approved was expected to define SIFIs in a way that would leave the Australian prudential system untouched.The Reuters report suggested that some additional requirements could be applied to a wider group of SIFIs over time.