--- title: "G-SIB Surcharge: definition, formula, and thresholds" description: "The G-SIB Surcharge is an additional CET1 capital requirement applied to Global Systemically Important Banks (G-SIBs). The eight US G-SIBs face surcharges ranging from 1.0% to 4.5% on top of the standard capital framework." canonical_url: https://www.bankregreports.com/glossary/gsib-surcharge/ source: BankRegReports category: "Capital" units: "%" schedule: "Annual FRB surcharge announcement" --- # G-SIB Surcharge > The G-SIB Surcharge is an additional CET1 capital requirement applied to Global Systemically Important Banks (G-SIBs). The eight US G-SIBs face surcharges ranging from 1.0% to 4.5% on top of the standard capital framework. ## Formula ``` Effective CET1 minimum = 4.5% + 2.5% buffer + G-SIB surcharge ``` The Federal Reserve assigns each G-SIB a score based on size, interconnectedness, substitutability, complexity, and cross-jurisdictional activity. Higher scores produce higher surcharges. Method 2 (using a substitute reliance-on-short-term-wholesale-funding indicator) is generally the binding calculation for US G-SIBs. ## Why it matters The surcharge is the regulatory premium for being 'too big to fail.' JPMorgan Chase, the largest US G-SIB, faces a 4.5% surcharge. Its total CET1 requirement is 11.5% with its stress capital buffer at the 2.5% floor. The surcharge is a direct counterweight to the implicit funding subsidy that comes from being a G-SIB. ## How to read it G-SIB surcharges are republished annually by the Federal Reserve. Movement between buckets is rare but newsworthy. The total effective CET1 floor for a US G-SIB is the 7% (4.5% min + 2.5% CCB) baseline plus the surcharge, 8.0-11.5% when the stress capital buffer is at its 2.5% floor. ## Thresholds | Range | Reading | What it means | |---|---|---| | 0% | Non-G-SIB | Standard capital framework only. | | 1.0โ€“2.0% | Lower tier | State Street (1.0%), BNY and Wells Fargo (1.5%). | | 2.5โ€“3.5% | Middle tier | Bank of America and Morgan Stanley (3.0%), Citigroup and Goldman Sachs (3.5%). | | 4.0โ€“4.5% | Highest tier | JPMorgan Chase (4.5%). | ## Worked example Surcharges in effect on January 1, 2026: JPMorgan Chase 4.5%, Citigroup 3.5%, Goldman Sachs 3.5%, Bank of America 3.0%, Morgan Stanley 3.0%, Wells Fargo 1.5%, Bank of New York Mellon 1.5%, State Street 1.0% (Federal Reserve, Large Bank Capital Requirements, June 2026). Every other US bank faces no G-SIB surcharge. ## Questions ### Which US banks are G-SIBs? Eight: JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, Morgan Stanley, Bank of New York Mellon, and State Street. ### Why is JPM's surcharge higher than the others? JPMorgan scores highest across most of the five systemic-importance indicators (size, complexity, interconnectedness, etc.), placing it in the highest US bucket. ### Does the G-SIB surcharge change over time? Yes. The Federal Reserve publishes scores annually and a G-SIB can move between buckets as its size and complexity shift. A July 2023 proposal to recalibrate the calculation was replaced by a re-proposal in March 2026, with comments due June 18, 2026; check the Federal Reserve's site for its final status. ## Sources - [12 CFR ยง217.403-406: G-SIB surcharge, method 1 and method 2 scores, and short-term wholesale funding score](https://www.ecfr.gov/current/title-12/part-217) - Annual Federal Reserve G-SIB surcharge publication ## Related metrics - [Common Equity Tier 1 Capital Ratio](https://www.bankregreports.com/glossary/cet1-ratio/): The CET1 ratio measures a bank's highest-quality capital (common stock and surplus, retained earnings and, for banks that have not opted out, accumulated other comprehensive income, less regulatory deductions) against its risk-weighted assets. It is the most-watched single capital indicator in US bank supervision after the 2013 Basel III reforms. - [Supplementary Leverage Ratio](https://www.bankregreports.com/glossary/supplementary-leverage-ratio/): The Supplementary Leverage Ratio (SLR) measures Tier 1 capital against total leverage exposure, including off-balance-sheet items. It applies only to the largest US banks under Basel III as a non-risk-weighted backstop. - [Capital Conservation Buffer](https://www.bankregreports.com/glossary/capital-conservation-buffer/): The Capital Conservation Buffer (CCB) is a 2.5% layer of CET1 capital that sits on top of the Basel III minimums. Banks operating inside the buffer face automatic restrictions on dividends, share buybacks, and discretionary bonuses. - [Stress Capital Buffer](https://www.bankregreports.com/glossary/stress-capital-buffer/): The Stress Capital Buffer (SCB) is a bank-specific CET1 buffer derived from the Federal Reserve's annual stress test. It replaces the static 2.5% capital conservation buffer for the largest banks and floors at 2.5%. ## About this document This is the markdown twin of the page named in `canonical_url` above. Source filings are public record; the cleaning, normalization, cross-source linkage, and derived metrics are BankRegReports' own. Attribute with a link to the canonical URL. Markdown twins are published for editorial content only. Institution data pages do not have them. For data at scale use the API, which is documented at https://www.bankregreports.com/api/ and specified at https://www.bankregreports.com/openapi.json. It returns typed JSON with explicit units and periods, and one call replaces hundreds of page fetches. ## Sitemap - [Glossary](https://www.bankregreports.com/glossary/): every metric, with formula and thresholds - [Blog](https://www.bankregreports.com/blog/): analysis and explainers - [API documentation](https://www.bankregreports.com/api/): the programmatic way to get this data - [XML sitemap](https://www.bankregreports.com/sitemap.xml): the complete crawlable index