When we talk about having an international approach to regulating systemically important institutions, there’s an interesting question as to how that group of institutions should be defined. I am firmly of the view that they should be defined by their global importance, not their relative importance within their own national systems.
The purpose of a global SIFI policy (to use a cumbersome expression) is to limit international spillovers, where the failure of a major bank can affect the system as a whole because of its global scale. Individual countries can and do have their own SIFI policies for institutions that are large in domestic terms.