2016年-FSB全球金融稳定委员会_Guiding_Principles_on_the_Internal_Total_Loss_32页_1mb

Summary of the FSB Consultative Document: "Guiding Principles on the Internal Total Loss-absorbing Capacity of G-SIBs ('Internal TLAC')"

Overview

The Financial Stability Board (FSB), in consultation with the Basel Committee on Banking Supervision (BCBS), finalized the Total Loss-absorbing Capacity (TLAC) standard in November 2015. This standard aims to ensure that Global Systemically Important Banks (G-SIBs) can be resolved in an orderly manner without risking public funds. A key component of the TLAC standard is Internal TLAC, which refers to the loss-absorbing capacity that resolution entities commit to material sub-groups.

Internal TLAC is designed to allow losses and recapitalisation needs of subsidiaries within a material sub-group to be passed to the resolution entity without requiring those subsidiaries to enter resolution. The FSB is seeking feedback on the implementation of Internal TLAC through a consultative document, which outlines guiding principles for identifying material sub-groups, setting internal TLAC requirements, and managing the process of triggering Internal TLAC.

Core Content and Key Principles

I. Material Sub-group Identification and Composition

• Guiding Principle 1: Host authorities should identify material sub-groups in consultation with the home authority and the Crisis Management Group (CMG). The home authority is responsible for coordinating this process.
• Guiding Principle 2: Host authorities, in consultation with the home authority and CMG, should determine the composition of the material sub-group and the distribution of internal TLAC. The distribution should support the resolution strategy by enabling the stabilisation of entities within the sub-group.
• Guiding Principle 3: Multi-jurisdictional material sub-groups should only be formed if there is a common resolution regime or high cooperation between host authorities. They are expected in exceptional circumstances.
• Guiding Principle 4: Regulated or unregulated non-bank entities should be included in material sub-groups only if necessary for the credibility of the resolution strategy. Authorities should assess whether alternative arrangements (e.g., sector-specific resolution regimes) could achieve continuity.

II. Size of the Internal TLAC Requirement

• Guiding Principle 5: Host authorities retain the ultimate responsibility for setting internal TLAC requirements for material sub-groups in their jurisdiction, in consultation with the home authority. The requirement should be sufficient to support the resolution strategy and ensure market confidence.
• Guiding Principle 6: The home authority should coordinate the setting of internal TLAC requirements across different sub-groups to ensure consistency and avoid exceeding the external Minimum TLAC requirement. It should also assess whether the sum of internal TLAC requirements exceeds the external TLAC.

III. Composition and Issuance of Internal TLAC

• Guiding Principle 8: The composition of internal TLAC should reflect the risk profile and strategic importance of the entities within the material sub-group. It may include debt liabilities accounting for up to 33% of the sub-group’s internal TLAC.
• Guiding Principle 10: Internal TLAC instruments should be issued in a way that ensures they are readily available for recapitalisation. Authorities should consider potential drawbacks, such as market perception or liquidity risks, and explore ways to mitigate them.
• Guiding Principle 12: Authorities should identify and address obstacles to implementing internal TLAC, such as legal, operational, or regulatory barriers. Additional obstacles may arise in multi-jurisdictional contexts.

IV. Features of Trigger Mechanisms

• Guiding Principle 13: Contractual trigger clauses should be clear and legally binding, ensuring that losses and recapitalisation needs can be passed to the resolution entity. These clauses should align with the TLAC term sheet.
• Guiding Principle 14: Host authorities should consider the use of Point of Non-Viability (PONV) powers, which allow for the triggering of internal TLAC at the point of non-viability of the sub-group, provided the home authority consents.

V. Process for Triggering Internal TLAC

• Guiding Principle 15: Home and host authorities should communicate before triggering internal TLAC to ensure alignment with the resolution strategy.
• Guiding Principle 17: The host authority should determine when to trigger internal TLAC, subject to home authority consent. The process should be transparent and consistent with the TLAC term sheet.
• Guiding Principle 19: Internal TLAC should be used to recapitalise entities within the material sub-group, and the process should ensure that losses are passed to the resolution entity in a legal and credible manner.
• Guiding Principle 20: The choice between write-down and conversion into equity should be based on the resolution strategy and the nature of the instruments.

Key Considerations

• The internal TLAC requirement for a material sub-group should be between 75% and 90% of the external Minimum TLAC requirement that would apply to the sub-group if it were a resolution group.
• Host authorities must ensure that internal TLAC is readily available and can be deployed to recapitalise subsidiaries in the material sub-group.
• Non-pre-positioned TLAC at the resolution entity should be considered to support the resolution strategy.
• The composition of the material sub-group must be coherent and aligned with the resolution strategy, not merely to meet quantitative thresholds.
• Collaboration between home and host authorities is essential to ensure consistency, transparency, and legal certainty in the implementation of internal TLAC.

Conclusion

The consultative document outlines a framework for the implementation of internal TLAC in G-SIBs, with a focus on ensuring that resolution can occur without exposing public funds to risk. It provides guidance on identifying material sub-groups, determining internal TLAC requirements, and managing the trigger and issuance process. The FSB invites responses by 10 February 2017 to refine these principles and address potential challenges in their application.