Mark Carney plans more capital rules for banks to end taxpayer bailouts
Global banks face more capital fine tuning as Mark Carney leads the drive to end taxpayer bailouts over the coming weeks and months.
The Bank of England governor has been re-appointed as the head of the Financial Stability Board (FSB) – a group of global regulators – and is expected to propose more fine-tuning of capital buffers.
On his agenda will be co-ordination between countries on where global banks hold capital, and the size of the buffers they need to build. When global banks collapse, the regulators in each country in which they operate need to know how to respond together.
The plans to address this are expected to include more details on total loss-absorbing capacity (TLAC).
If banks hold the buffers across their group, the idea is it will be possible for losses in each country to be absorbed by buffers in that country.
And by planning ahead, Carney hopes regulators in each country will know how to respond, rather than clamping down on the bank and its capital in their own country.
The FSB is due to publish more of its plans, following a nine-month consultation, today.