'Total Loss-Absorbing Capacity' Proposal Comes to the U.S.
In her International Banking column, Kathleen A. Scott provides a high-level general summary of the Federal Reserve Board's proposed rule requiring global systemically important banks to meet new requirements to maintain a "total loss-absorbing capacity" ratio that can be met by a combination of additional regulatory capital and unsecured long-term debt.
November 12, 2015 at 10:00 PM
12 minute read
On Oct. 30, 2015, the Federal Reserve Board issued a proposed rule requiring global systemically important banks (GSIBs) to meet new requirements to maintain a “total loss-absorbing capacity” (TLAC) ratio that can be met by a combination of additional regulatory capital and unsecured long-term debt.1
This proposal would apply to both U.S. bank holding companies classified as GSIBs and the U.S. operations of non-U.S. banking organizations classified as GSIBs. It is aimed at strengthening the resiliency of the GSIBs on an ongoing basis while providing for a more orderly resolution if a GSIB should fail. Comments are due on or before Feb. 1, 2016. Compliance is proposed to begin Jan. 1, 2019, and be fully phased-in by Jan. 1, 2022.
The proposed TLAC requirement and additional related proposals are quite complex. This month's column provides a high-level general summary of the proposal. Non-U.S. banks classified as GSIBs with U.S. operations organized under an intermediate holding company (IHC) will be directly affected by this proposal and they will want to analyze whether the U.S. proposal may conflict with current or pending home country laws and regulations.
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Trending Stories
- 1The Law Firm Disrupted: For Big Law Names, Shorter is Sweeter
- 2Wine, Dine and Grind (Through the Weekend): Summer Associates Thirst For Experience in 'Real Matters'
- 3The 'Biden Effect' on Senior Attorneys: Should I Stay or Should I Go?
- 4'That's Disappointing': Only 11% of MDL Appointments Went to Attorneys of Color in 2023
- 5'You Are Not Alone': 120 Sex Assault Victims Plan to Sue Sean 'Diddy' Combs
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250