Total Loss Absorbing Capacity

(TLAC).

Bank resolution and recovery

The term eventually favoured by the FSB (replacing Gone-concern or Gone Concern Loss Absorbing Capacity - GCLAC or GLAC) to describe the debt or capital available to absorb losses in mostly banks.

Closely related to (but different from) the term Minimum Requirement for Own Funds and Eligible Liabilities (MREL) used in the European Bank Recovery and Resolution Directive.

As at the end of 2014, TLAC is due to be applied to G-SIBs not before 1 January 2019.

External TLAC applies to each resolution entity in a bank group.

Internal TLAC applies to subsidiaries of a resolution entity not being resolved in the entity's home jurisdiction and can include for example collateralised guarantees provided from the parent.

See also

• Capital adequacy

• Loss absorbing capacity

• PLAC

• SLAC

• MREL

• Gone concern

• Bailin