FSB unveils final TLAC standard
Global systemically important banks will need to build sizeable stocks of loss-absorbing capacity
The Financial Stability Board (FSB) unveiled its final standard for minimum loss-absorbency held by global banks today (November 9).
The total loss-absorbing capacity (TLAC) standard will apply to all global systemically important banks (G-Sibs), and forms a central plank in efforts to make big banks resolvable.
Under the final standard, G-Sibs will be expected to hold loss-absorbency in the form of capital or 'bail-inable' debt. Banks must reach an initial minimum of 16% of risk-weighted assets
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