FDIC’s Hoenig: don’t impose TLAC, let equity 'do its job'

FDIC vice-chair says TLAC should reflect individual bank business models

Thomas Hoenig, FDIC

Regulators should rely on equity to absorb bank losses, rather than pushing ahead with the new concept of bail-in debt, according to Thomas Hoenig, vice-chairman of the Federal Deposit Insurance Corporation (FDIC).

That would imply higher minimum equity levels. Bail-in debt – which can be written down to support the resolution of a stricken bank – would make up around one-third of a large bank's total loss-absorbing capacity (TLAC), the final standards for the regime having been issued by the