US and EU outline final rules on loss-absorbency
Fed adopts final rule on loss-absorbency; EBA makes recommendations
Regulators on both sides of the Atlantic have moved closer to implementing rules on loss-absorbency, with the Federal Reserve issuing final rules and the European Banking Authority (EBA) making final recommendations.
On December 15, the Fed unveiled details of the long-term debt it will require systemic banks to hold. The debt can be converted to equity in a crisis, theoretically restoring the bank to solvency, or allowing it to be liquidated in a more orderly fashion.
Fed governor Daniel
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