KARACHI: The State Bank of Pakistan has designed a framework for identification, regulation/supervision of domestic systemically important banks (D-SIBs) in the country, to ensure financial stability.

The central bank is seeking comments from the banking industry, academia, economists and other stakeholders before its implementation.

The focus on D-SIBS came in the wake of recent global financial crisis.

Financial Stability Board/Basel Committee on Banking Supervision (BCBS) in November 2011 issued a global systemically important financial institutions (G-SIFIs) framework to enhance resilience of large institutions. The framework was extended to D-SIBs in October 2012.

The framework encompasses; setting criteria for identifying the D-SIBs and a way forward on policy implications with respect to D-SIBs to enhance their resilience.

It adopts the benchmark BCBS methodology for constructing criteria. Indicators used to gauge systemic importance include: size, interconnectedness, substitutability and complexity.

Published in Dawn, July 31st, 2015

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