The addition of a Chinese bank to the Financial Stability Board’s (FSB) latest list of systemically-important global banks (G-SIBs) signals Asia’s growing stature within the global financial system, Fitch Ratings says.

In a new report, the rating agency notes that the addition of the Industrial and Commercial Bank of China (ICBC) to the FSB’s annual list of global systemically important banks (G-SIBs) highlights the growing importance of Asia to the global financial system. And, it says, “With ongoing strategies to expand overseas and moves to internationalize the Chinese yuan, Asian banks could increase their presence on the G-SIB list.”

The number of Asian-focused institutions considered systemically important has increased from five to seven since the initial list was created in 2011, Fitch notes, with Standard Chartered joining the group last year and ICBC this year. “ICBC has actively increased its international reach since 2008, largely to support the global presence of its Chinese corporate clients,” it says.

Inclusion on the FSB’s annual list means both higher capital requirements and tougher oversight. Fitch says that the added capital shouldn’t be an issue for ICBC, as it already meets a higher threshold imposed by Chinese regulators. Rather, it expects the greater scrutiny of its risk management, data, governance and controls “is likely to be the more challenging aspect” of G-SIB designation.

Indeed, Fitch says that it believes all of the 29 G-SIBs are “well positioned” to meet their additional capital requirements. “Many banks have strengthened their capital substantially over the past year, and we believe the globally active trading and universal banks will maintain [common equity tier one] ratios of at least 9%-10%,” it says. “Management are likely to target some buffer above this minimum to maintain flexibility. Regulators could add further buffers to minimum requirements, such as countercyclical buffers.”

The FSB list segments the banks that are considered systemically important, so that those that are most important are required to hold the most capital. In the latest list, Fitch notes that Deutsche Bank and Citigroup moved down to a 2% capital buffer, and Bank of New York Mellon went down to a 1%. Conversely, Credit Agricole was raised to the 1.5% bucket.

“The changes to the G-SIB group reflect data quality improvements, change in methodology and changes in underlying systemic importance,” it says.

Moreover, Fitch also suggests that most of the banks will target capitalization that is in line with their peers’, even if they are subject to different capital requirements, “so the moves of banks to lower ‘buckets’ are unlikely to change their capital plans.”