International practices in the measurements, rankings and supervision on the systemic risk of commercial banks and recommendations to Vietnam

Abstract

One of the main lesses on the global financial crisis in 2007-2009 is that the collapse of one financial institution could create severe shocks to the financial markets and negatively impact the economy. The lack of regulatory tools in measuring systematically important banks and providing early warnings leads to insufficient and inefficient responses from the policymakers to the systematic shocks. Thus, global regulators has increasingly focused on developing regulatory tools to measure and identify the systematically important financial institutions (SIFIs). This paper aims at providing a review on the systemic risk in the banking sector. In particular, we provide some policy recommendations in the measurements, rankings and supervision on the systemic risk of commercial banks based on international practices in G20 countries, Japan and Malaysia.