1  Institute of International Finance (2010): “Net Cumulative Economic Impact of Banking Sector Regulation: Some new Perspectives”, October 11, 2010. 2  BIS central bankers’ speeches  Against this background, the G20 has endorsed an ambitious program that aims at reducing the probability of default of a SIFI.
As a key priority, it has been agreed that SIFIs should have higher loss absorbency capital beyond Basel III standards. The purpose of these requirements is threefold: first, to increase SIFIs resilience to adverse shocks; second, to internalise the costs of distress they impose on the financial system; and third, to restore proper incentives with respect to their risk-taking.