On November 10, 2014, the FSB launched a consultation on policy proposals for enhancing the loss-absorbing capacity G-SIBs. The proposals comprise (i) principles on the loss absorbing and recapitalization capacity of G-SIBs in resolution; and (ii) a term sheet on Total Loss Absorbency Capital (“TLAC”) for implementing the principles as an internationally agreed standard. The FSB is proposing to introduce a new minimum Pillar 1 requirement for TLAC on a going concern and gone concern basis which incorporates the existing Basel III minimum requirements but excludes the Basel III capital buffers. The aim of the development of the new standard, prepared by the FSB with the Basel Committee, is to ensure that G-SIBs can be resolved without resorting to taxpayer funding, with a minimum impact on financial stability and ensuring continuity of critical services. It is intended that the TLAC proposals will be finalized before the G20 Leaders meeting in 2015. Responses to the consultation are due by February 2, 2015.
The consultation paper is available at: