An IMF paper published in November shows that under stricter forms of ring-fencing, banking groups need substantially larger capital buffers at the parent subsidiary level than under less strict ring-fencing.

Ring-fencing refers to the restrictions on cross-border transfers of excess profits and capital between a parent bank and its subsidiaries when they are located in different jurisdictions. The paper's authors - Eugenio Cerutti, Anna Ilyina, Yulia Makarova and Christian Schmieder - analyse