Directive 2013/36/EU on the prudential supervision of credit
institutions and investment firms requires what the directive
defines as "systemically important institutions", that
is, institutions of such significance that their failure or
malfunction could lead to systemic risk, to maintain appropriate
contingency buffers of common equity tier one capital, over and
above the levels required for other, non-systemically important,
institutions.
The directive divides systemically important institutions into
two categories: global systemically important institutions
("G-SIIs") and other systemically important institutions
("O-SIIs"), assessed on the basis of factors including
size, importance to the European or national economy, significance
of cross-border activities and interconnectedness with the
financial system.
