Systemic European banks’ bail-in buffers fell in Q1
Bail-in debt stocks increase, but balance sheet expansion crimps TLAC ratios
The total loss-absorbing capacity (TLAC) of Europe’s top banks declined over the first quarter, even though many built up amounts of bail-in eligible debt and capital.
Risk Quantum analysis of 14 resolution entities linked to 11 of the 12 global systemically important banks (G-Sibs) in the UK, European Union, and Switzerland found that the average ratio of TLAC to risk-weighted assets (RWAs) declined 53 basis points, to just over 27%, through Q1. The ratio of TLAC to leverage exposure fell 27bp
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