Basel proposal to cause ‘huge problem’ for TLAC market-making

Proposal requiring banks to deduct holdings of other banks’ TLAC debt could restrict market-making

chasing-dollar-2-shutterstock-274837349-converted
"A big deal": proposal would force banks to deduct holdings of other dealers' loss-absorbing debt

A proposal to force banks to deduct holdings of other dealers' loss-absorbing debt from their capital buffers may make it difficult for dealers to act as market-makers for the potentially huge amount of securities due to be issued, according to capital experts. An unclear definition of what constitutes so-called total loss-absorbing capacity (TLAC) has also left some confused about how much capital may need to be removed.

"You can see why they're doing it, because they don't want the circular

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Register

Want to know what’s included in our free membership? Click here

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here