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The Financial Stability Board (FSB) defines Systemically Important Financial Institutions (SIFTs) as “financial institutions whose distress or disorderly failure because of their size, complexity and systematic interconnectedness, would cause significant disruption to the wider financial system and economic activity”
At the international level, the Basel Committee on Banking Supervision has developed a methodology for identifying G-SIB's, and a set of principles to guide national authorities in the identification of domestic systematically important banks (D-SIB's). G-SIB status is determined using five main criteria: cross-jurisdictional activity; interconnectedness; size; substitutability and complexity. The methodology (issued via SAMA circular no. 107018 dated 10 July 2013) is also used to rank a G-SIB’s level of systemic importance relative to other G-SIB's. The list of G-SIB's is reviewed annually, and banks can move in or out of G-SIB classification or be re-classified at a different level of systemic importance.
Updated G-SIB list should be received from the website
Domestic Systematically Important Bank (D-SIB):
A D-SIB is a bank whose distress or disorderly failure could have a serious detrimental impact on either the financial system or the real economy within the country in which the bank operates. The BCBS has published a framework for developing a D-SIB assessment methodology (issued via SAMA circular no. 351000138356 dated 7 September 2014 and circular no. 371000091395 dated 24/05/2016). In connection with identifying and notifying banks with respect to the D-SIB designation, SAMA is required to:
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Take into consideration size; interconnectedness; substitutability; and complexity (including additional complexities caused by cross-border activity) within the domestic economy;
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Produce a D-SIB list (issued via SAMA circulars no. 56165/67 dated 14/05/2019, 391000089191 dated 03/05/2018, 381000082448 dated 02/05/2017 and 371000091395 dated 24/05/2016), and review it on an annual basis; and
Updated D-SIB list should be received from the SAMA website.
The relationship between G-SIB's and D-SIB’s:
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Banks can be classified as D-SIB at the consolidated group level or subsidiary or a branch level by the bank's supervisory authorities.
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A bank identified as a G-SIB can also be classified as a D-SIB in any of the countries depending on the nature of operations.
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A bank with large global operations identified as G-SIB that does not have significant operations in any individual country can also be classified as a G-SIB
