The Financial Stability Board recently issued for consultation proposals to increase the loss-absorbing capacity of global systemically important banks over and above the fully loaded Basel III capital standards.

Overview -

The Financial Stability Board (“FSB”), in consultation with the Basel Committee on Banking Supervision (the “Basel Committee”), recently issued a long anticipated public consultation on requirements for sufficient “total loss-absorbent capacity” or “TLAC”, which requires certain banks and bank groups to hold an increased amount of capital relative to both risk-weighted assets and non-risk-weighted assets. The new rules, once finalized, will be applicable to 29 global systemically important banks (“G-SIBs”) and their related entities1 and are expected to be implemented at national level in all relevant jurisdictions.