US Fed chair out with comments on the Total Loss Absorbing Capacity initiative. Bloomberg reporting
- Fed set to vote on TLAC proposal in Washington
- seeks loss-absorbing capacity of 16% of assets by 2019, 18% by 2022
- Fed also to vote on related rule setting long-term debt minimum
To end government bailouts, the Financial Stability Board proposed global systemically important banks have minimum levels of securities that can be bailed-in, which may require bondholders to take losses. Because total loss-absorbing capacity (TLAC) securities exclude deposits and may include senior parent-company debt, big U.S. banks heavily funded by deposits such as JPMorgan and Wells Fargo may need to boost senior debt issuance to meet new requirements. Large banks are already among the biggest bond issuers.
Add:
- US banks to face $120bln shortfall under the Fed TLAC plan
- Fed's rule broadly matches parts of global regulators' plan
$120bln short-fall? Best keep that cheap money coming for a bit longer yet then Janet
Meanwhile FX markets are trading at a lesser pace as the session draws to a close with a bit of profit-taking going through
Update: 19.25 GMT - Fed approves long-term debt plan by unanimous decision
