Furthermore, it can be applied to banks which are systemically important internationally as well to banks that are not systemically important at the global level but at the domestic level. This means that the SIFI framework takes account not only of interlinkages across sectors but also of the close connection between national and supranational levels.
In designing the new Basel framework, Basel III, the close interlinkages in the financial system – between sectors as well as between jurisdictions – have to be taken into account in order to prevent regulatory arbitrage.