The Basel Committee on Banking Supervision has finalised rules that stop big banks looking smaller on reporting dates. Its systemic-importance indicators will use averages over the year, not year-end figures, for the assessment published in 2030. From 2027, the threshold for reporting and publishing the indicators rises from EUR 200 billion to EUR 350 billion.
What is a G-SIB, and how are banks scored?
A global systemically important bank (G-SIB) is one whose failure could damage the global financial system and economy. Chapter SCO40 of the Basel Framework, the Committee’s consolidated standards, sets out how they are identified.
Each year the Committee scores a sample of banks. It includes the 75 largest by leverage ratio exposure measure (broadly, total on- and off-balance-sheet exposure), last year’s G-SIBs and banks added by supervisors. Five categories carry 20% each: size, interconnectedness with other financial firms, substitutability (how hard its payment, custody and similar services are to replace), complexity and cross-jurisdictional activity (business abroad).
An indicator score is the bank’s share of the sample total in basis points (0.01%), so 3% of total size scores 300. A score of 130 or more makes a G-SIB. Each G-SIB bucket carries a higher loss absorbency (HLA) requirement. That is extra Common Equity Tier 1, the highest-quality capital, held against risk-weighted assets.
Score in basis points; HLA as a share of risk-weighted assets (RBC40.4).
A near-G-SIB is a bank that is not a G-SIB but scored 100 basis points or more in the previous year. Until now the indicators have been measured at the financial year-end, and banks above EUR 200 billion of leverage ratio exposure have published their 13 indicators each year.
What is window dressing, and why did the Committee act?
Window dressing means shrinking balance-sheet numbers around a reporting date. Illustration, with made-up numbers: a large bank lends cash in the repo market: short loans backed by securities. Its repo book is EUR 80 billion every day except 31 December, when it lets EUR 30 billion run off.
Measured at year-end, as today, the book counts at EUR 50 billion. Here is the same book measured three ways.
After consulting in March 2024, the Committee cites evidence that “some banks take steps to temporarily lower the values of certain indicators at year-end, which results in an underestimation of their systemic importance.” Those indicators decide the G-SIB list and each bank’s HLA.
The Committee calls window dressing “unacceptable”, saying it “risks disrupting the operations of financial markets.” Our reading: a bank that drops a bucket by shrinking for a few days holds less capital than its usual footprint calls for, and averaging removes most of that benefit.
What changes, and for which banks?
Two things change: how indicators are measured, and which banks must report. The buckets, the 130 basis point cutoff and the HLA rates stay.
1. Indicators are averaged, not read at year-end
There are two tiers. At a minimum, all banks must average each stock indicator’s quarter-end values over the financial year. A stock indicator is a balance on a date, such as total exposures. Flow indicators, such as payments, cover the whole year and are not averaged.
G-SIBs and near-G-SIBs follow the standard’s Table 1. On-balance-sheet items containing securities financing transactions (SFTs: repos, reverse repos, securities lending and margin lending) and derivatives will be averaged on daily values.
| Indicator (stock) | G-SIBs and near-G-SIBs | Other banks |
|---|---|---|
| Cross-jurisdictional claims and liabilities | Quarterly | Quarterly |
| Total exposures; intra-financial system assets and liabilities | Monthly Daily for on-balance-sheet SFT and derivative items | Quarterly |
| Securities outstanding; assets under custody | Monthly | Quarterly |
| Notional amount of over-the-counter (OTC) derivatives | Daily | Quarterly |
| Level 3 assets (valued on inputs not observable in the market) | Quarterly | Quarterly |
| Trading and available-for-sale securities | Monthly (daily on a best-efforts basis) | Quarterly |
National authorities may require higher frequencies, for example over window-dressing concerns. A bank that newly reaches 100 basis points gets lead time. One scoring 100 in the end-2030 assessment reports averages from 1 January 2033. Published indicators must use the same averages.
2. The reporting threshold rises to EUR 350 billion
Who must report is still set by the leverage ratio exposure measure at the previous year-end. From 2027 the threshold rises from EUR 200 billion to EUR 350 billion.
From when does it apply?
- 2027
EUR 350 billion threshold, from the end-2026 assessment exercise. End-2025 data decide who reports.
- 1 Jan 2028
Transition: year-end values plus best-efforts averages for the end-2028 exercise. Supervisors are expected to apply judgment to material differences.
- 1 Jan 2029
Higher-frequency data required, for all of 2029.
- 2030
Assessment published on 2029 averages. The resulting HLA applies from 1 January 2032.
Basel standards reach banks through national rules: Committee members have agreed to implement them fully for internationally active banks. bis.org lists the standard as “Forthcoming”.
What should banks prepare for?
Our suggestions, not requirements of the standard:
- G-SIBs and near-G-SIBs will need daily capture of on-balance-sheet SFT and derivative balances and OTC derivative notionals, with insurance activities in scope for six indicators.
- Use the 2028 transition year to size your own year-end versus average difference.
- Banks close to 100 basis points can check last year’s results on the Committee’s G-SIB dashboard.
Points to watch: detailed guidance sits in the Committee’s reporting instructions. Domestic timing is to be set by each national authority. A separate consultation of the same day, the G-SIB methodology review, asks about cross-border exposures within the European Banking Union; comments are due by 14 January 2027.
Legal basis
- From 1 Jan 2027 (Annex 1)
- SCO40.19, 40.32, 40.33 and 40.35; DIS75 Template GSIB1
- From 1 Jan 2030 (Annex 2)
- SCO40.9 to 40.15 (averaging in 40.11 to 40.13), 40.22, 40.35 and 40.38
Key facts
| Authority | Basel Committee on Banking Supervision (Bank for International Settlements) |
|---|---|
| Instrument | Global systemically important banks – revised assessment framework to address window dressing (amends SCO40 and DIS75) |
| Issue date | 16 October 2026 |
| Effective date | 1 January 2027 (EUR 350 billion threshold); 1 January 2030 (averaging), transition from 1 January 2028 |
| Applies to | Banks in the G-SIB assessment, through national rules |
| Status | Final standard; listed as Forthcoming on bis.org |
| Official source | bis.org, Amendments to G-SIB framework to address window dressing |
| Last verified | 20 October 2026, on bis.org |
Frequently asked questions
Does the standard change the G-SIB buckets or surcharge rates?
No. The 130 basis point cutoff, the buckets and the HLA rates are not among the amendments. What changes is how the indicator values are measured.
What is a near-G-SIB?
A bank that is not a G-SIB but scored 100 basis points or more in the previous year’s assessment. It uses the same higher frequencies as G-SIBs.
When must banks first report averaged figures?
On a best-efforts basis from 1 January 2028, for the end-2028 exercise. As a requirement, on 2029 data, for the assessment published in 2030.
Which banks must publish G-SIB indicators from 2027?
Banks whose leverage ratio exposure measure, including insurance subsidiaries, exceeded EUR 350 billion at the previous year-end, plus last year’s G-SIBs and banks added by supervisors.
Sources (official)
- Basel Committee, publication page, 16 October 2026 https://www.bis.org/publications/202610-standards-amendments-g-sib-framework-address-window-dressing
- Basel Committee, final standard (PDF) https://www.bis.org/publications/202610-standards-amendments-g-sib-framework-address-window-dressing.pdf
- BIS media release https://www.bis.org/media-releases/20261016-basel-committee-finalises-measures-address-window-dressing-g-sib-framework-and-consults-g-sib
- Basel Framework, SCO40 (in force) https://www.bis.org/committees/bcbs/basel-framework/standard/sco/40/inforce/2021-11-09/published/2021-11-09
- Basel Framework, RBC40 https://www.bis.org/committees/bcbs/basel-framework/standard/rbc/40/inforce/2019-12-15/published/2019-12-15
- Consultative document, March 2024 https://www.bis.org/publications/202403-consultation-global-systemically-important-banks-revised-assessment-framework
- G-SIB methodology review (consultation) https://www.bis.org/publications/202610-consultation-global-systemically-important-banks-methodology-review
- G-SIB assessment and dashboard https://www.bis.org/bcbs/gsib/index.htm
- The Basel Framework https://www.bis.org/basel_framework/
- Basel Framework, CRE50 (SFT definition) https://www.bis.org/committees/bcbs/basel-framework/standard/cre/50/inforce/2019-12-15/published/2024-07-05
- Global
- Basel Committee
- G-SIB
- Window dressing
- Higher loss absorbency
- Banking Regulations
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