Global Systemically Important Banks: Emphasis on Higher Loss Absorbency

Shusong Ba ()

Chapter Chapter 43 in The New Cycle and New Finance in China, 2022, pp 335-350 from Springer

Abstract: Abstract In November 2014, the Financial Stability Board (FSB) issued policy proposals consisting of a set of principles and a term sheet on enhancing the loss-absorbing capacity of global systemically important banks (G-SIBs), forming a new minimum standard for total loss-absorbing capacity (TLAC). Based on dynamic international financial regulation, this paper introduces the main content of the new TLAC standard and its relationship with the Basel III regulatory capital. On this basis, the paper analyzes the eligibility criteria, types of TLAC debt instruments and the differences between them and Tier 2 capital instruments as well as their possible impact on the liabilities of G-SIBs and puts forward relevant policy recommendations about how to deal with the new TLAC standard from the perspective of regulators and large banks, respectively.

Keywords: Systemically important banks; Basel III; TLAC (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-16-8209-4_43

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DOI: 10.1007/978-981-16-8209-4_43

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