US issuers push for structured notes TLAC carve-out
Dealers are urging the Federal Reserve not to “throw the baby out with the bathwater” by excluding principal-protected structured notes from TLAC buffers
US banks have stepped up their efforts to persuade the Federal Reserve to soften rules that would bar most of their $73 billion outstanding stock of structured notes from counting towards loss-absorbing capital buffers.
Last October, the Fed issued draft total loss-absorbing capacity (TLAC) requirements for US-domiciled global systemically important banks (G-Sibs), based on rules drawn up by the Financial Stability Board (FSB) that require dealers to hold bail-inable capital and debt equivalent
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