New risk indicator ensnares BofA, benefits Chinese banks

Overhaul in substitutability category pushed US bank's capital surcharge to 2%

A methodology overhaul in the assessment of global systemically important banks sentenced Bank of America to a higher surcharge bucket while benefiting two of China’s largest dealers, which respectively won a lower surcharge and escaped G-Sib designation altogether, Risk Quantum analysis shows.

This year’s assessment of too-big-to-fail firms saw the introduction of trading volume scores for equity and fixed-income intermediation, an addition to the substitutability category that was finalised