...Final TLAC Principles Published: The finalisation of the total loss-absorbing capacity (TLAC) standard for 30 global systemically important banks (G-SIB) ahead of the Antalya G20 Summit represents an important milestone in the agenda to end "too big to fail". TLAC must generally be subordinated to certain "excluded liabilities". TLAC that is not external senior debt and protects all senior liabilities to third-party non-government creditors could be positive for bank Issuer Default Ratings (IDR). In general, counterparties will fare better under TLAC than senior bondholders. TLAC is more likely to be neutral for outstanding senior debt ratings unless it is met with large Tier 2 or new "senior subordinated" debt buffers. National discretion over "pillar 2" TLAC, combined buffer requirements, and different approaches to subordination mean there will be differences in the volumes and form of TLAC and capital buffers. Positive rating actions are likely to vary in form and will not be universal....
