STOCK MARKET WATCH -- Wednesday, 19 November 2014

[Demeter]

23. Banks Face 25% Loss Buffer as FSB Fights Too-Big-to-Fail

AND HERE THEY THOUGHT GLOBALISM MEANT THROWING AWAY ALL THE RULES...

http://www.bloomberg.com/news/2014-11-10/banks-face-25-loss-buffer-as-fsb-fights-too-big-to-fail.html

The world’s largest banks will have to boost loss-absorbing liability buffers to see them through a crisis, as regulators move to tackle too-big-to-fail lenders six years after the collapse of Lehman Brothers Holdings Inc.

The Financial Stability Board, led by Bank of England Governor Mark Carney, said today that the biggest banks may be required to have total loss-absorbing capacity equivalent to as much as a quarter of their assets weighted for risk, with national regulators able to impose still-tougher standards. The FSB is seeking comment on the rule, known as TLAC, which would apply at the earliest in 2019.

The plans are a “watershed” in regulators’ mission to end the threat posed by banks whose size and systemic importance mean their failure would be catastrophic for the global economy, Carney told reporters today in Basel, Switzerland. “The outlines of how we are going to end too-big-to-fail are here.”

The rules are the latest step by the FSB in a five-year quest to boost banks’ resilience in the face of financial shocks. Agreement has already been reached on measures including tougher capital requirements and enhanced scrutiny by supervisors.

The TLAC rules would apply to the FSB’s register of global systemically important banks. The latest list, published last week, contains 30 banks, with HSBC Holdings Plc (HSBA) and JPMorgan Chase & Co. (JPM) identified as the most significant....MORE