Basel proposal to cause ‘huge problem’ for TLAC market-making
Proposal requiring banks to deduct holdings of other banks’ TLAC debt could restrict market-making
A proposal to force banks to deduct holdings of other dealers' loss-absorbing debt from their capital buffers may make it difficult for dealers to act as market-makers for the potentially huge amount of securities due to be issued, according to capital experts. An unclear definition of what constitutes so-called total loss-absorbing capacity (TLAC) has also left some confused about how much capital may need to be removed.
"You can see why they're doing it, because they don't want the circular
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