Nov
10
China’s Big Banks Have Longest Road to Meet Loss-Absorbing Needs
By-
Four too-big-to-fail lenders have nine years to reach 16% TLAC
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Banks need to issue $290 billion bonds to cover shortfall
China’s giant banks got a nine-year breather to issue the securities they need to meetstandards for loss absorbency laid down by the Financial Stability Board, an acknowledgment of the challenge this implies for the largely deposit-funded lenders.
The country’s four lenders on the FSB’s list of the world’s too-big-to-fail banks have until 2025 to reach total loss-absorbing capacity of 16 percent of risk-weighted assets, six more years than their peers from developed markets. The ratio rises to 18 percent in 2028. Under the FSB’s original proposals, banks headquartered in emerging markets were to be exempted from total loss absorbing requirements…
China’s Big Banks Have Longest Road to Meet Loss-Absorbing Needs
