FSB consults on TLAC standard technicals

The Financial Stability Board (FSB) published a call for public feedback on the technical implementation of the FSB’s Total Loss-Absorbing Capacity (TLAC) Standard. In November 2015 the FSB issued a new standard on the adequacy of total loss-absorbing and recapitalization capacity for Global Systemically Important Banks (G-SIBs) in resolution (the TLAC standard). The TLAC standard seeks to ensure that G-SIBs have at all times sufficient loss-absorbing and recapitalization capacity available so that in case of failure they can be resolved in a manner that minimizes impacts on financial stability, maintains the continuity of critical functions, and avoids exposing public funds to loss.

The TLAC standard will be phased in from January 2019. The FSB made a commitment to report, by the time of the G20 Leaders’ Summit in June 2019, on whether the implementation of the TLAC standard is proceeding in a manner consistent with the timelines and objectives set out in the TLAC standard and to identify any technical issues or operational challenges in the implementation. The views and evidence submitted in response to this call for public feedback should help inform the FSB’s monitoring. The FSB is not seeking views on the standard itself or any desired changes. However, based on its monitoring and the feedback received, FSB members may consider the development of further implementation guidance.

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