RBC, TD remain on "too big to fail" list | Investment Executive (2024)

Royal Bank of Canada (RBC) and TD Bank remain Canada’s only members on the list of global systemically important banks (G-SIBs), which defines banks considered “too big to fail” by regulators.

The Financial Stability Board (FSB) published its G-SIB list for 2020 on Nov. 11. The list, which is updated annually in November, determines the additional capital and oversight requirements for banks that could pose a risk to the global financial system if they run into solvency trouble.

The banks on the list are assigned to “buckets” that determine the capital buffer requirements that apply to each bank. Both Canadian banks remain in the lowest bucket.

In the latest update, several major U.S. banks have also moved to lower buckets. JP Morgan Chase has moved from bucket four to bucket three, and Goldman Sachs and Wells Fargo have dropped from bucket two to bucket one.

Only one bank has moved to a higher bucket. China Construction Bank was moved to bucket two from bucket one.

Alongside the updated list, the Basel Committee on Banking Supervision released additional data on the 2020 G-SIB assessments that aims to enhance the understanding of banks’ G-SIB scores.