Systemic Risk Buffer
The systemic risk buffer is an additional capital buffer required of very large financial firms in the European Union under CRD IV.
The aim of the SRB is to raise the capacity of ring-fenced banks and large building societies to withstand stress, thereby increasing their resilience.
This reflects the additional damage these firms could cause to the economy if they were close to failure.
The size of a firm’s SRB is designed to reflect the relative costs to the economy if the firm fell into distress.