The Role of Systemic Importance: Pin the Threshold on the Regulation
Report Summary
The Role of Systemic Importance: Pin the Threshold on the Regulation
Systemically risky practices, not size alone, should determine institutions’ systemic importance.
Boston, November 18, 2015 – The 2010 Dodd-Frank Act identifies and regulates U.S. institutions as potential risks to the financial system based solely on their size. In many other countries, however, size accounts for only 25% of a bank’s total systemic importance. Concerns surrounding Dodd-Frank are top of mind across financial institutions, but is the United States’ single, size-based criterion for determining an institution’s systemic importance as accurate as methodologies that consider several criteria?
This research presents the results of a proprietary study exploring the true nature of systemic risk in the U.S. financial system. It includes results from various Aite Group surveys as well as third-party partners.
This 18-page Impact Note contains seven figures. Clients of Aite Group’s Institutional Securities & Investments or Retail Banking & Payments service can download this report.