July 06, 2017

FSB published two guidance documents to assist authorities in implementing its standard on total loss-absorbing capacity (TLAC). These documents were issued for public consultation in December 2016 and have been revised in light of the comments received during the consultation.

Guiding Principles on Internal TLAC of Global Systemically Important Banks (G-SIBs). This document sets out high-level guiding principles to assist the Crisis Management Group authorities in the implementation of internal TLAC mechanisms consistent with the TLAC standard. These guiding principles support the implementation of the internal TLAC requirement and provide guidance on the:

Size and composition of the internal TLAC requirement

Cooperation and coordination between home and host authorities

Trigger mechanism for internal TLAC

 

TLAC standard defines a minimum requirement for the instruments and liabilities that should be held by global systemically important banks (G-SIBs) and readily available for bail-in within resolution. It also requires a certain amount of those loss-absorbing resources to be committed to subsidiaries or sub-groups that are located in host jurisdictions and deemed material for the resolution of the G-SIB.

 

Guidance on Continuity of Access to Financial Market Infrastructures (FMIs) for a Firm in Resolution. This guidance sets out arrangements and safeguards to facilitate continuity of access to FMIs for a firm in resolution that apply at the level of the providers of FMI services, at the level of FMI participants and at the level of the relevant resolution and FMI authorities. This guidance is intended to assist in evaluating whether G-SIBs (and, if considered appropriate by resolution authorities, other firms that are subject to their resolution planning requirements) have appropriate arrangements to support continuity of access to critical FMI services during or after entry into resolution by the firm or its parent or any affiliate. A key objective of effective resolution is to maintain the continuity of a firm’s critical functions. This requires a firm in resolution to maintain the continued access to clearing, payment, settlement, custody, and other services by FMIs.


Related Links

Guidance on TLAC for G-SIBs

Guidance on FMI Access for Firms in Resolution

Keywords: International, FSB, Banking, FMI, Resolution Planning, TLAC

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