UBS, Credit Agricole Capital Surcharges Lowered in FSB 2014 List
Nov. 6 (Bloomberg) — UBS AG and Credit Agricole Group had their planned capital surcharges lowered in the Financial Stability Board’s 2014 list of too-big-to-fail lenders, which expanded to included Agricultural Bank of China Ltd.
The FSB, led by Bank of England Governor Mark Carney, said HSBC Holdings Plc and JPMorgan Chase & Co. are in line to face the highest-level capital surcharge — 2.5 percent of risk- weighted assets — imposed on the list’s banks.
The addition of Agricultural Bank of China takes the number of Chinese banks on the list to three. The updated list expanded to 30 from 29 in 2013. The phase-in of the surcharges will begin in 2016. UBS and Credit Agricole are now set for a 1 percent surcharge, down from 1.5 percent.
Regulators are ranking financial firms by their potential to cause a global meltdown and demanding bigger financial cushions from them to avert any repeat of the 2008 credit freeze. The surcharge represents the amount of capital a bank must have beyond the minimums, known as Basel III, already set by global regulators to fortify all internationally-active banks in their ability to cope with losses.
To contact the reporter on this story: Jim Brunsden in Brussels at jbrunsden@bloomberg.net To contact the editors responsible for this story: Patrick Henry at phenry8@bloomberg.net