Reports related to Total Loss Absorbing Capacity (TLAC) published by the Basel Committee
9 November 2015
The Financial Stability Board (FSB) published today its Principles on the Loss Absorbing and Recapitalisation Capacity of G-SIBs in Resolution and Total Loss Absorbing Capacity (TLAC) term sheet. In support of this effort, the Basel Committee on Banking Supervision has released today two related documents.
The Basel Committee's TLAC Quantitative Impact Study (QIS) Report analyses the TLAC levels and shortfalls at global systemically important banks (G-SIBs) based on the FSB's November 2014 consultative version of the TLAC term sheet. The quantitative impact study is a critical component of the impact analysis of the TLAC regime. In particular, it provides the main data set that is the basis of the analysis Assessing the economic costs and benefits of TLAC implementation, which was led by staff of the Bank for International Settlements.
The TLAC quantitative impact study also examines the extent that G-SIBs and non-G-SIBs currently invest in TLAC instruments. This has helped to inform the second of today's Basel Committee publications related to TLAC. The TLAC Holdings consultative document sets out the proposed regulatory capital treatment of TLAC instruments, which are held by banks (both G-SIBs and non-G-SIBs). This proposed prudential treatment seeks to limit contagion within the financial system if a G-SIB were to enter resolution.
The Committee welcomes comments on the TLAC holdings consultative document. Comments on the proposals should be uploaded here by Friday 12 February 2016. Alternatively, comments may be sent by post to: Secretariat of the Basel Committee on Banking Supervision, Bank for International Settlements, CH-4002 Basel, Switzerland. All comments may be published on the website of the Bank for International Settlements unless a respondent requests confidential treatment.