JP Morgan, BNP Paribas … The 12 banks that weigh the most globally

Some banks weigh more than others in the economy. To the point that they are considered “systemic”. If they were to go bankrupt, they could rock the financial system and cause a global crisis, like the bankruptcy of investment bank Lehman Brothers in September 2008, which in its fall threw the world into crisis. financial. Each year, the Financial Stability Board (FSB), created in 2009 by the G20, draws up a list of the biggest banks on the planet.

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Its ranking, published Wednesday, November 23, includes 30 establishments in 2021, the same as a year earlier. Among them are four French banks. Societe Generale, Crédit Agricole and BPCE are among the smallest systemic banks, and as such belong to the first category determined by the FSB. They will therefore have to have an additional layer of equity of 1% from January 1, 2023.

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BNP Paribas for its part joined the upper echelon, to land in group 3 alongside HSBC and Citigroup. The capital surcharge requirement is 2% for this group.

Equity is the capital, the resources that a company possesses, thanks to the profits generated from year to year and kept by it, as well as the money brought in by its shareholders. They oppose, for example, debts to banks and suppliers. Generally, the more equity a company has, the more creditworthy it is.

BNP Paribas among the four most important

BNP Paribas already had a hard capital ratio (CET1) of 13% at the end of September, recalls L’Agefi. And its TLAC (total loss absorbing capacity) reached 26%, or 6 points more than what is required.

The minimum level of capital that banks and investment firms must hold is 8% risk-weighted assets. Quite simply, this means that in order to lend a total of 100 million euros, a bank must have at least 8 million euros of equity to be considered solvent. However, additional more complex requirements are imposed on large institutions, in particular following the Basel III G20 agreements in 2010.

The Financial Stability Board estimates the systemic importance of banks based on the complexity of their activities, their presence in various jurisdictions, their degree of interconnection with the financial ecosystem, the size of their balance sheets, as well as their their substitutability if they go bankrupt.

Here are the 12 most important systemic banks, according to the FSB, as well as the category to which they belong, determining the excess capital required for each of them:

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1. JP Morgan Chase: category 4 (+ 2.5% required equity)

2. Citigroup: category 3 (+ 2%)

3.HSBC: category 3 (+ 2%)

4. BNP Paribas: category 3 (+ 2%)

5. Industrial and Commercial Bank of China : catégorie 2 (+1,5%)

6. Mitsubishi UFJ Financial Group: category 2 (+ 1.5%)

7. Bank of America: category 2 (+ 1.5%)

8. Bank of China: category 2 (+ 1.5%)

9. Deutsche Bank: category 2 (+ 1.5%)

10. Barclays: category 2 (+ 1.5%)

11. China Construction Bank: category 2 (+ 1.5%)

12. Goldman Sachs: category 2 (+ 1.5%)

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