BPI-GFMA-IIF Comment Letter on the Technical Implementation of the FSB TLAC Standard

In conjunction with the Global Financial Markets Association (GFMA) and the Institute of International Finance (IIF), BPI submitted a response to the Financial Stability Board’s (FSB) request for information on the technical implementation of its “TLAC” standard on the adequacy of total loss-absorbing and recapitalization capacity for G-SIBs in resolution. The letter expressed BPI’s support for the consistent global implementation of a well-constructed TLAC standard and its belief that, together with other post-crisis resilience enhancements and actions taken by firms themselves, it will secure a durable end to “too big to fail.” The FSB should issue guidance encouraging regulators to administer the regulatory capital buffers that complement TLAC minimums in a manner consistent with the TLAC Term Sheet in order to promote harmonized implementation across jurisdictions, the letter argues, as well as encourages the BCBS to revise the TLAC holdings standard to adopt the like-for-like principle of the Basel III capital framework’s corresponding deduction approach.