bancos recurso camara acorazada TC

EU banks would need extra €460bn to meet GLAC requirements

MADRID | The Corner | The results of the stress test will presumably be positive for the 128 European entities, although some experts do not rule out new capital increases and Coco bonds issuances, not only to strengthen their balance sheets, but also to meet other capital requirements such as gone concern loss-absorbing capacity ratios (GLAC). If they finally were to reach 25%, the main European banks would have additional capital requirements of about €460 billion in the next five years, according to Santander analysts.


big banks mergers

GLAC, a term you’ll need to become familiar with after the summer

MADRID | By Raimundo Poveda | Those who are interested in banking policy are doomed to learn some new term day in, day out. GLAC (i.e. “gone-concern loss-absorbing capacity”) is the capacity to absorb the losses of an unfeasible bank. Let us recall that the banking regulation declares a bank “unfeasible” not when it collapses but when it fails to comply with the minimum capital requirements –even if its financial assets are positive.