BIS: Big Financial Institutions Must Be Charged Higher For Potential Risk

Sponsored Links

Monday, the Bank for International Settlements said the contribution of an institution to system-wide risk generally increases more than proportionately with its size.

Any "systemic capital charge" applied to individual institutions should increase more than proportionately with relative size, BIS, also known as the central bank of central banks said in a study, which is part of its quarterly review. Tighter prudential standards should be applied to larger institutions, the Basel, Switzerland-based BIS added.

The charge should rise with the exposure of the institution to sources of systematic risk. That is firms with higher capital charges would be applicable to institutions that are more similar to the typical institution.

Monday, the Bank for International Settlements said the contribution of an institution to system-wide risk generally increases more than proportionately with its size. (Market News Provided by RTTNews)