FSB: tougher loss-absorbency homework for too-big-to-fail banks

The FSB wants the largest lenders to reach a total of 25.0% loss absorption rate, but hybrid instruments (CoCos or convertible bonds) and subordinated debt will also be taken into account.

In addition, the Basel Committee could announce a review of the methods of standard calculation of risk-weighted assets and greater restrictions on internal models. Its draft rules will be handed to the G-20 summit in Brisbane, Australia, next month.

The final goal is to ensure taxpayers are no longer to bear the burden when banks fail.

*Related content: GLAC, a term you’ll need to become familiar with after the summer


About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

Be the first to comment on "FSB: tougher loss-absorbency homework for too-big-to-fail banks"

Leave a comment