Comparison of FSB TLAC Standards to Federal Reserve TLAC Proposal

On November 9, the Financial Stability Board issued its final standards for Total Loss Absorbing Capacity (TLAC) for global systemically important banks (G-SIBs). This followed on the heels of the Federal Reserve’s issuance of its proposal to impose TLAC and related requirements on U.S. G-SIBs and the IHCs of foreign G-SIBs. While broadly consistent with the framework of the FSB standards, the Federal Reserve proposal is much more restrictive than, and deviates from, the final FSB term sheet, in a number of meaningful ways.