This approach combines the existing minimum capital requirements with new requirements to ensure that large banks have sufficient capacity to absorb losses, both before and during resolution. TLAC therefore, in my view, represents a watershed in ending “too big to fail”.
It will allow for the orderly resolution of those banks without disrupting the financial system and while protecting taxpayers from having to foot the bill. For the TLAC-concept, I wish to signal my strong support. To achieve these worthy goals, I suggest agreeing upon a figure at the upper end of the range of 16% – 20% proposed by the FSB.