Loss absorbing capacity

Bank supervision - prudential regulation.

(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

• Bank supervision
• Capacity
• Debt
• Equity
• GCLAC or GLAC gone-concern loss absorbing capacity
• MREL minimum requirement for own funds and eligible liabilities
• Primary Loss Absorbing Capital (PLAC)
• Prudential regulation
• Recovery
• Resolution
• Secondary Loss Absorbing Capacity (SLAC)
• Senior
• Subordinated debt
• Total Loss Absorbing Capacity
• Unsecured
• Unsecured debt