Global Banks Face 25% Loss-Absorbency Rule in FSB Plan
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The largest global banks will have to hold more capital and liabilities than previously reported that can automatically be written off in a crisis -- as much as a quarter of risk-weighted assets -- as regulators take on lenders deemed too big to fail.
The Financial Stability Board is developing minimum standards that will limit the double-counting of capital banks use to meet existing international rules, according to an FSB working document sent for comment to Group of 20 governments and obtained by Bloomberg News.