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Financial Stability Board seeks feedback on TLAC implementation

The Financial Stability Board is seeking public feedback on the technical implementation of the total loss-absorbing capacity, or TLAC, standard for global systemically important banks, or G-SIBs.

The standard is meant to ensure that G-SIBs constantly have enough loss-absorbing and recapitalization capacity to resolve difficulties with minimal impact on financial stability in the event of a failure. Banks will be required to have a certain amount of so-called bail-in-able debt, which they can utilize in times of trouble instead of relying on government rescues.

The regulator said it targets to report on whether the TLAC standard is timely implemented and to identify technical issues or operational constraints by the time of the G-20 leaders' summit in June 2019. The standard will be phased in from January 2019.

The FSB said it is not looking for feedback on the standard itself or any desired changes. Interested participants have until Aug. 20 to provide feedback on the implementation of the rules.