Playing it Safe: Global Systemically Important Banks after the Crisis
13 Pages Posted: 14 Oct 2019
Date Written: September 22, 2019
Post-crisis reforms aim to mitigate the systemic risks that arise from global systemically important banks (G-SIBs). Based on our estimates of G-SIBs' probability of distress, we find that their resilience has improved in recent years on the back of higher capital ratios. Furthermore, by benchmarking G-SIBs' balance sheet adjustments against those of other major banks, we show that these adjustments accord with the incentives set by the post-crisis regulatory framework. This suggests that the systemic importance of G-SIBs has declined in recent years.
JEL Classification: G21, G28, C25
Suggested Citation: Suggested Citation