TLAC trap may give US banks edge

摘要

The five major US investment banks look set to benefit from a regulatory turf war over how large global banks should hold loss-absorbing capital to prevent another banking failure such as Lehman Brothers. That is because foreign banks may have to hold more local capital in their US subsidiaries than US banks, which have won market share from European rivals since the 2008 financial crisis, will need to hold in their overseas arms. Last October, the US Federal Reserve rushed out a proposal, ahead of global recommendations from the Financial Stability Board, requiring the US operations of foreign global systemically important banks to issue TLAC, total loss absorbing capital, internally to their parents.