Bericht

Implementing bail-in properly

A recent proposal by the Financial Stability Board (FSB) suggests a new risk capital buffer for globally operating systemically important financial institutions. The suggested metric, "Total Loss Absorbing Capacity" (TLAC), is composed of Tier-1 capital and loss absorbing debt. In a crisis situation, "bail-in-able" debt is to be written down or converted into equity. Jan Krahnen argues that the credibility of bail-in, in the case of systemically important financial institutions, hinges crucially on the design of TLAC and the requirements that will be placed on loss absorbing "bail-in-able" debt.The fear of direct systemic consequences through bail-in could be overcome, if a holding ban were placed on the "bail-in-bonds" of financial institutions. The holding ban would stipulate that these bonds cannot be held by other institutions within the banking sector.

Sprache
Englisch

Erschienen in
Series: SAFE Policy Letter ; No. 35

Klassifikation
Wirtschaft
Thema
total loss absorbing capacity (TLAC)
too big to fail
bail-in
nachrangiges Fremdkapital

Ereignis
Geistige Schöpfung
(wer)
Krahnen, Jan Pieter
Ereignis
Veröffentlichung
(wer)
Goethe University Frankfurt, SAFE - Sustainable Architecture for Finance in Europe
(wo)
Frankfurt a. M.
(wann)
2014

Handle
URN
urn:nbn:de:hebis:30:3-356804
Letzte Aktualisierung
10.03.2025, 11:43 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Bericht

Beteiligte

  • Krahnen, Jan Pieter
  • Goethe University Frankfurt, SAFE - Sustainable Architecture for Finance in Europe

Entstanden

  • 2014

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