Crédit Agricole moved up a notch in the list of banks too big to fail

The Financial Stability Board published on Tuesday the list of 29 banks globally considered too big to let them fail, moving French bank Crédit Agricole up a notch this year. The French bank has been moved to category 2, whereas it was previously in category 1, which means that it will have to comply with stricter requirements in terms of the capital it must set aside to be able to resist in shock to the banking system and financial markets.

The Financial Stability Board, which was tasked by the G20 with carrying out reforms of the financial system after the 2008 crisis, has published since 2012 a list of so-called systemically important banks at the global level, which it updates each year. They are divided into five categories which correspond to different degrees of capital requirements and loss absorption capacities. Their number remained unchanged in 2024, with 29 banks, the Financial Stability Board said in a press release.

If Crédit Agricole has gone up a notch, Bank of America has for its part gone down a notch, moving into category 2, whereas this American bank was previously in category 3. No bank is in category 5, the requirements higher therefore concerning the American JP Morgan Chase, classified in category 4. It must therefore constitute a higher capital cushion than the other banks. Category 3 brings together Citigroup and HSBC.

In 2023, the Crédit Suisse group was removed from this list which previously included 30 banks. To prevent the second largest bank in Switzerland from going bankrupt, the Swiss authorities urgently negotiated its takeover by its competitor UBS in March 2023. When this list was updated seven months later, the Council of financial stability had strengthened the requirements with regard to UBS, moving the Swiss bank into category 2, alongside, among others, Barclays, BNP Paribas, Goldman Sachs and Bank of China.