Loss absorbing capacity
From ACT Wiki
(LAC).
In the field of bank resolution and recovery, loss absorbing capacity is the ability of a bank to suffer losses without falling below regulatory minima of capital and requiring re-capitalisation or resolution.
LAC may take the form of equity, subordinated debt, senior unsecured debt, and other unsecured uninsured liabilities.
See also
- PLAC primary loss absorbing capacity
- SLAC secondary loss absorbing capacity
- GCLAC or GLAC gone-concern loss absorbing capacity
- MREL minimum requirement for own funds and eligible liabilities
