Fed under pressure to rethink TLAC rules

US becomes the first G20 nation to propose total loss absorbing capacity rules, but deems existing debt ineligible for inclusion

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Paul Tucker: "TLAC isn’t about faith; it’s about contracts"

Even by Wall Street standards, $363 billion is a big number. That is the estimated shortfall in outstanding long-term debt that needs to be made up by the eight US global systemically important banks (G-Sibs) by 2019, in order to satisfy their total loss-absorbing capacity (TLAC) requirements.

The deficit, calculated by a group of five US bank trade associations, is three times the size of the Federal Reserve’s own estimate. In its October 2015 rule, proposing the TLAC requirements, the US

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