FSB published a call for public feedback on the technical implementation of its total loss-absorbing capacity (TLAC) standard for global systemically important banks (G-SIBs). The submitted views and evidence should help assess whether the implementation of the TLAC standard is proceeding in a manner consistent with the TLAC principles and Term Sheet. FSB will report on the results of its monitoring by the time of the G20 Summit in June 2019. Comments should be submitted by August 20, 2018.
FSB had issued the TLAC standard in November 2015. The TLAC standard seeks to ensure that G-SIBs have, at all times, sufficient loss-absorbing and recapitalization capacity available in case of resolution. The TLAC standard will be phased in from January 2019. G-SIBs will be required to meet a minimum TLAC requirement of at least 16% of the resolution group’s risk-weighted assets (TLAC RWA Minimum) from January 01, 2019 and at least 18% from January 01, 2022. Minimum TLAC must also be at least 6% of the Basel III leverage ratio denominator (TLAC Leverage Ratio Exposure, or LRE, Minimum) from January 01, 2019 and at least 6.75% from January 01, 2022. G-SIBs headquartered in the emerging market economies will be required to meet the 16% RWA and 6% LRE Minimum TLAC requirement no later than January 01, 2025, along with the 18% RWA and 6.75% LRE Minimum TLAC requirement no later than January 01, 2028.
Comment Due Date: August 20, 2018
Keywords: International, Banking, TLAC, G-SIBs, Systemic Risk, Assessment of Implementation, FSB
Sam leads the quantitative research team within the CreditEdge™ research group. In this role, he develops novel risk and forecasting solutions for financial institutions while providing thought leadership on related trends in global financial markets.
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