Japan's markets may struggle under weight of TLAC issuance
Japanese banks start to ponder how they will cope with new TLAC rules
Japan's megabanks are likely to need to issue more debt in order to meet new total loss-absorbing capacity (TLAC) rules from the Financial Stability Board (FSB) – but doubts remain about whether the domestic market can cope with such issuance.
Under the new rules, due to be finalised in November, the basic TLAC requirement will be between 16–20% of a bank's risk-weighted assets (RWA), with at least a third of this made up of senior debt instruments that can be easily converted to equity in the
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