Basel Committee tightens G-SIB rules to curb window dressing by banks
Banks will have to report G-SIB indicators as yearly averages rather than year-end values, with the revised standard to be implemented by 1 January 2030.
AI illustrationThe Basel Committee on Banking Supervision has published final amendments to its framework for global systemically important banks, or G-SIBs, aimed at curbing window dressing. Under the change, banks will have to base the stock indicators behind their G-SIB scores on average values across the reporting year instead of year-end figures.
Window dressing, as the Committee describes it, seeks to make a bank's systemic footprint look temporarily smaller around the reference dates used to report and publicly disclose G-SIB scores. The Committee said it has previously called such behaviour by banks unacceptable. It said the practice undermines the intended policy goals of its standards and risks disrupting how financial markets operate.
The amendments aim to limit how far banks can lower their scores this way. Banks taking part in the G-SIB assessment exercise will be required to report and disclose all stock G-SIB indicators on the basis of the year's average values. The Committee said the revised standard will be implemented by 1 January 2030, a timetable intended to give banks enough time to build a robust and comprehensive reporting process.
The Committee has also agreed to raise the threshold for G-SIB reporting and disclosure from EUR 200 billion to EUR 350 billion in leverage ratio exposure measure. That change is to be implemented from 2027.
Separately, the Committee opened a consultation as part of its periodic review of the G-SIB assessment methodology. It is asking whether its previously agreed treatment of cross-border exposures within the European Banking Union (EBU) should be built into the framework. The Committee said it welcomes stakeholder comments on all aspects of the consultation, with a deadline of 14 January 2027.