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Journal
2015 | 3 (60) | 23-36
Article title

TLAC : Systemic Risk Issues and the Impact on Strategies of Cross-Border Banks

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Content
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Languages of publication
EN
Abstracts
EN
The FSB's proposal on Total Loss Absorbing Capacity (TLAC) constitutes the last major building block of the post-crisis regulatory reform agenda for global financial markets. The proposal aims at creating the preconditions for an orderly liquidation of complex banking institutions that would ensure the continuation of critical financial services without the need to use taxpayers' money in the resolution. The FSB's proposals are fundamentally conducive to achieving these aims. However, the TLAC proposal will have considerable side-effects on the organisational structure and competitiveness of cross-border banking groups; specifically, it is likely to disadvantage banking groups with material foreign subsidiaries. Moreover, while the TLAC proposal provides a comprehensive framework concerning capital requirements for too-big-to-fail institutions, the treatment of other aspects which influence systemic stability, e.g. liquidity and rollover risk, are underdeveloped.
Journal
Year
Issue
Pages
23-36
Physical description
Contributors
  • Berlin Senate for Finance
References
  • 1.Alexander, Philip (2015): Is TLAC an Anglo-Saxon conspiracy? In: The Banker, January Available at http://www.thebanker.com/Regulation-Policy/Reg-Rage/Is-TLAC-an-Anglo- Saxon-conspiracy
  • 2.Basel Committee on Banking Supervision (2014): Basel III: the net stable funding ratio; Basel.
  • 3.Credit Suisse (2015): TLAC - Towards a Global Resolution Regime, CS Global Equity Research, 25 February 2015.
  • 4.Deutsche Bank (2014): European Banks Strategy: Outlook 2015 - the shape of bank earnings, DB Markets Research, 10 December 2014.
  • 5.European Central Bank (ECB, 2014): Financial Integration in Europe, Frankfurt / Main
  • 6.European Financial Congress (EFC, 2015): Position of the European Financial Congress concerning the Financial Stability Board's consultative document.
  • 7.Financial Stability Board (FSB, 2014a): Adequacy of loss-absorbing capacity of global systemically important banks in resolution; Consultative Document, Basel.
  • 8.Financial Stability Board (FSB, 2014b): 2014 update of list of global systemically important banks (G-SIBs), Basel.
  • 9.Financial Stability Board (FSB, 2013): Recovery and Resolution Planning for Systemically Important Financial Institutions - Guidance on Developing Effective Resolution Strategies, Basel.
  • 10.German Banking Industry Committee (2015): Comments on the FSB's Consultation Paper, available at: http://www.die-deutsche-kreditwirtschaft.de/uploads/media/ GBIC_Comments_on_FSB_TLAC-Requirements.pdf
  • 11.Glover, John, Nicholas Comfort and Ben Moshinsky (2015): Sleep-at-Night Bank-Debt Buyers seen Cool on TLAC Bonds, Bloomberg, 10 February 2015, available at www. bloomberg.com/news/articles/2015-02-10/sleep-at-night-bank-debt-buyers-see-cool- on-tlac-bonds
  • 12.Goodhart, Charles (2015): TLAC- and the what? Response to the FSB's consultation paper, available at http://www.financialstabilityboard.org/wp-content/uploads/ Charles-Goodhart-on-TLAC.pdf
  • 13.Gracie, Andrew (2014): Total Loss-Absorbing Capacity - the thinking behind the FSB Term Sheet; Speech given at Citi European Credit Conference; available at http:// www.bankofengland.co.uk/publications/Documents/speeches/2014/speech783.pdf
  • 14.PriceWaterhouse Coopers (PwC, 2014): Ten key points from the FSB's TLAC ratio; PwC's First Take, November 14.
  • 15.Schildbach, Jan and Bernhard Speyer (2013): La banque universelle: Un modele menace malgre son succes, in: Revue d'Economie Financiere, No. 112, pp. 125-157.
  • 16.Schoenmaker, Dirk (2013): Governance of International Banking - The Financial Trilemma, Oxford.
  • 17.Tarullo, Daniel K. (2014): Dodd-Frank Implementation, Testimony before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C., September 9, 2014, available at: http://www.federalreserve.gov/newsevents/ testimony/tarullo20140909a.htm
  • 18.Zhou, Jiangping, Victoria Rutledge et al. (2014): Resolving Systemically Important Financial Institutions: Mandatory Recapitalisation of Financial Institutions Using "Bail-Ins", in: Enoch, Charles et al. (eds.): From Fragmentation to Financial Integration in Europe, Washington, D.C., pp. 433-456.
Document Type
Publication order reference
Identifiers
YADDA identifier
bwmeta1.element.desklight-2ed420fd-d5cb-484f-8c31-25851fd71691
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