Japanese banks fear 20% TLAC increase

Recalibration of Basel risk weights raises fresh concerns over bail-in buffer levels

Image of Japanese yen

Proposed changes to Basel bank capital rules could add 10% to 20% to risk-weighted assets (RWAs) for Japanese banks, potentially undermining their efforts to meet the new standard for bail-in debt buffers known as total loss-absorbing capacity (TLAC), industry sources are warning.

“Based on current RWA calculations, banks have no serious concerns about TLAC. However, if the RWA numbers change, this could be an issue for Japanese banks. An additional 10–15% of TLAC is not a small amount and

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