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ARTICLE · 22 JULY 2012

D-SIBs to hold additional capital under Basel III - Implications for Australian banks uncertain

Given the market dominance of Australia's big four banks, they could qualify as D-SIBs under the assessment criteria.

AustraliaFinance and Banking

Key Points:

The framework establishes a minimum set of principles against which local regulators can evaluate whether a bank is a D-SIB and what additional capital it must hold.

On 29 June 2012, the Basel Committee of Banking Supervision issued a consultative document on its proposed framework for domestic systemically important banks (D-SIBs). The proposals supplement the framework for global systemically important banks (G-SIBs) announced by the Committee in December last year under which G-SIBs are required to hold an additional capital buffer in recognition of the potentially global impact of any failure on their part.

The proposed D-SIB framework recognises that, while certain banks may not be significant from an international perspective, they nevertheless have an important impact on their domestic economies. The framework establishes a minimum set of principles against which local regulatory authorities such as the Australian Prudential Regulatory

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