Bank of America down a notch on "too big to fail" list

On Tuesday, the body responsible for monitoring the global financial system downgraded US lender Bank of America Corp while upgrading French bank Credit Agricole SA on its "too big to fail" list of banks.

Bank of America down a notch on "too big to fail" list

Bank of America dropped from category two to category three, while no bank holds the top "bucket five" status among the 29 banks identified as systemically important to global finance. JPMorgan Chase & Co remains at the top in bucket four, with Citigroup Inc and HSBC Holdings PLC now in category three following BofA's downgrade. The Financial Stability Board (FSB), based in Basel, announced that Credit Agricole had been moved up one level to join Bank of America in category three.

Further changes

As a result, Credit Agricole will now face stricter regulations, particularly regarding capital requirements in case of financial difficulties affecting the sector. Following the 2008 crisis, the G20 assigned the FSB the task of implementing financial system reforms, and since 2012, the FSB has published an annual list of systemically important banks. The five categories, or "buckets," represent varying levels of capital requirements and loss-absorbing capacities. Credit Suisse was removed from the list last year following its emergency acquisition by UBS Group AG, as Swiss authorities moved to prevent concerns about a potential banking crisis. In its subsequent update, the FSB imposed stricter requirements on UBS, downgrading the Swiss bank to category two, where it now joins other major banks like Barclays PLC, BNP Paribas SA, Goldman Sachs Group Inc, and Bank of China.