A systemic Bank is a financial entity to which this qualifier is granted due to its large size and importance in the market, to the point that its fall or disappearance has high negative impacts for a particular country or region.
The concept of a systemic bank is closely related to systemic risk , and therefore this type of bank is usually required to have an extra capital cushion. On the other hand, it is said of them that in case of possible bankruptcies or financially limiting situations it is necessary to rescue them or protect them from the institutions to avoid total collapse of economic systems and states.
A large-scale problem in one of these large banking corporations could lead to a profound destabilization of the entire financial system . That is why they must often respond as counterpart to this security with different conditions before institutions, such as greater capital reserves . Alternatively, systemic entities are usually classified among local systemic banks or global banks.
The body responsible for determining what a systemic bank is is the Financial Stability Board , whose acronym is FSB ( Financial Stability Board ). This Board is responsible for the global coordination of the financial activity and of the entities that work in the sector internationally. Spanish representation in this plurinational organization is the responsibility of the Bank of Spain and the Ministry of Economy and Competitiveness.
In this way, the FSB promotes supervision and regulation policies. Among its work, the list is made annually, which includes those banks or credit institutions considered as systemic.
The conditions that this supervisory body requires for this denomination go through the overcoming of certain requirements: size, complexity, interconnection, substitutability and globality . However, the qualitative criterion that often exists on the part of the FSB also sometimes influences its designs.
With regard to Spanish entities, only two have been considered as systemic banks in recent years: Santander Bank and BBVA . However, the latter has recently left the list because, according to the criteria of the supervisory body (which may appear to be changing year after year) it does not meet all the requirements to be considered a systemic bank.