Basel Committee tightens G-SIB rules to curb window-dressing, raises reporting threshold

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Basel tightens G-SIB rules

Highlights

Basel Committee will require G-SIBs to report all stock indicators using average values over the reporting year, effective 1 January 2030.
The G-SIB reporting and disclosure threshold will rise from EUR 200 billion to EUR 350 billion in leverage ratio exposure, starting in 2027.
The Committee is consulting on incorporating cross-border exposures within the European Banking Union into G-SIB methodology, with stakeholder feedback due by 14 January 2027.

Rule changes and consultation timeline

As reported by the Bank for International Settlements, the Basel Committee on Banking Supervision has finalised amendments to the framework for global systemically important banks, or G-SIBs, to address window-dressing behaviour. Under the revised standard, banks in the G-SIB assessment exercise will have to report and disclose all stock indicators used in G-SIB score calculations on the basis of average values over the reporting year, rather than year-end figures, from 1 January 2030.

The Committee says window dressing is used to temporarily reduce banks' perceived systemic footprint around reference dates for reporting and public disclosure of G-SIB scores. It says such behaviour is unacceptable because it undermines the policy objectives of its standards and risks disrupting financial market operations.

The Basel Committee also says it is increasing the G-SIB reporting and disclosure threshold to EUR 350 billion in leverage ratio exposure measure from EUR 200 billion. That change is set to take effect from 2027.

Implications for banks and the review of methodology

The move is designed to make it harder for large banks to lower their G-SIB scores through short-term balance sheet management at period end. By shifting to average annual values, regulators are seeking a more consistent picture of a bank's systemic footprint over time rather than a snapshot at year-end.

Separately, the Committee is consulting on whether to incorporate its previously agreed treatment of cross-border exposures within the European Banking Union into the G-SIB methodology. Stakeholders are invited to comment on all aspects of the consultation by 14 January 2027.

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