Italy’s UniCredit exits world’s systemically important bank

Italy’s UniCredit is no longer among the world’s globally systemically important banks. These banks, known colloquially as the too-big-to-fail banks, are required to hold more capital than other institutions. The list is maintained by the Financial Stability Board, after consultations with national authorities as well as the Basel Committee on Banking Supervision, and the 2023 list was released on Monday. The banks on the list are required to have higher capital buffers, minimum levels of total loss-absorbing capacity, group-wide resolution planning and have higher supervisory expectations.

UniCredit fell off “Bucket 1,” the least demanding of the G-SIBs. Credit Suisse also is off the list having been acquired by UBS, which got promoted to “Bucket 2.” Also promoted were the Agricultural Bank of China and China Construction Bank. JPMorgan Chase (JPM) is still at “Bucket 4,” the only bank in that category, while Bank of America, Citigroup and HSBC are still at “Bucket 3.” Bank of Communications, or BoCom, is on the list for the first time.

No bank has ascended to the level of Bucket 5, which requires the most capital. “The changes in the allocation of the institutions to buckets largely reflect the effects of changes in underlying activity of banks, with the cross-jurisdictional activity category being the largest contributor to score movements,” said the FSB. Investors in UniCredit have enjoyed a strong year, with the stock up 88% in 2023. MarketWatch