FSB Said to Plan Loss-Absorbency Rules at Low End of Range
- Banks said to face TLAC level of 16% of risk-weighted assets
- Chinese banks on FSB list said to fall under rule in 2025
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The Financial Stability Board, the global regulator led by Bank of England Governor Mark Carney, will phase in a loss-absorbency requirement for the world’s biggest banks starting from the low end of its proposed range in 2019, according to people with knowledge of the decision.
Banks on the FSB’s list of global, systemically important institutions, led by HSBC Holdings Plc and JPMorgan Chase & Co., will need to have capital and debt available to take losses in a crisis equivalent to 16 percent of their risk-weighted assets in 2019, rising to 18 percent in 2022, according to the three people. The FSB originally proposed a range of 16 percent to 20 percent. A spokesman for the FSB declined to comment.