ML-Implode News - Banking Giants Learn Cost of Preventing Another Lehman Moment (G20 ADOPTS BAIL-INS!)

The Financial Stability Board, created by the Group of 20 nations in the aftermath of the crisis, published its plan for tackling banks seen as too big to fail.Â The most systemically important lenders must have total loss-absorbing capacity equivalent to at least 16 percent of risk-weighted assets in 2019, rising to 18 percent in 2022, the FSB said on Monday. A leverage ratio requirement will also be imposed, rising from 6 percent initially to 6.75 percent... Excluding the three Chinese banks in the FSB's 2014 list of the world's most systemically important institutions, that range drops to 107 billion euros to 776 billion euros.
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"There are a lot of important details to consider and hopefully improve, but the big picture is, if you have a bank rescue fund with $4 trillion to $5 trillion of resources, you can break the back of this problem."
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Bank of England Governor Mark Carney, who heads the FSB, said the rules make a major failure less likely because banks' creditors know they'll face losses in a collapse... By "bailing in" the bonds -- writing them down or converting them to equity -- regulators aim to ensure a lender in difficulty has the resources to be recapitalized without using public money, and to allow the resolved firm to continue to operate. In a departure from previous practice, senior debt issued by banks is explicitly exposed to loss.

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Banking Giants Learn Cost of Preventing Another Lehman Moment (G20 ADOPTS BAIL-INS!)