Other Systemically Important Institutions Buffer (O-SII Buffer)

Article 131 of the Capital Requirements Directive (CRD) (2013/36/EU) deals, among others, with the identification methodology for other systemically important institutions (O-SIIs). O-SIIs can either be an EU parent institution, an EU parent financial holding company, an EU parent mixed financial holding company or an institution. Such provisions have been transposed into Luxembourg by the Law of 23 July 2015 amending the Law of 5 April 1993 on the financial sector (LFS). Under Article 59-3 of the LFS, the CSSF is the national designated authority in charge of identifying O-SIIs. The CSSF takes its decisions after consultation with the Banque centrale du Luxembourg (BCL) and after requesting the opinion of the Comité du Risque Systémique (CdRS). The CSSF and the BcL have jointly developed a calibration methodology designed to translate the systemic importance of the institutions into O-SII buffer rates. Their assessments follow the European Banking Authority (EBA) O-SII Guidelines (the Guidelines) with which the CSSF has committed to comply. The Guidelines more particularly establish a mandatory scoring process for assessing systemic importance based on the following indicators: size, importance, complexity, and interconnectedness. In 2017, the CSSF in collaboration with the Luxembourgish central bank for the first time applied an extended methodology for the identification of O-SIIs. This methodology adds to the standard indicators a scoring category which picks up the importance of an institution with respect to connections with the domestic investment fund industry. This extended framework specifically acknowledges the importance of the wider financial sector for the Luxembourgish banking sector.

 

 

* CSSF Regulation N° 19-09 of 29 October 2019 (only in French)

concerning systemically important institutions authorised in Luxembourg


* CSSF Regulation N° 18-06 (only French)

concerning systemically important institutions authorised in Luxembourg


CSSF Regulation N° 17-04 (only in French) repealed by CSSF Regulation N° 18-06

on systemically important institutions authorised in Luxembourg


CSSF Regulation N° 16-08 repealed by CSSF Regulation N° 17-04

concerning systemically important institutions authorised in Luxembourg


CSSF Regulation N° 15-06 repealed by CSSF Regulation N° 16-08

concerning systemically important institutions authorised in Luxembourg