New TLAC ruling leaves G-SIBs with open goal in yen

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By Tyler Davies
24 May 2018

Regional Japanese banks have been freed up to invest in loss-absorbing senior debt following new guidance on the regulatory treatment of TLAC holdings. The world's largest FIG borrowers will need to move into the yen market quickly to take full advantage of this new but huge source of investment for their bonds, writes Tyler Davies.

The Japanese Financial Services Agency (JFSA) said in April that domestic banks would have to apply a risk weighting of 150% to any total loss-absorbing capacity (TLAC) eligible senior bonds they hold above a threshold equivalent to 5% of their core capital.

This was a relief for regional ...

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