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Fed Issues Final Rule to Help Ensure G-SIBs Can Be Resolved without Taxpayer Support

Sean Oblack

WASHINGTON, DC – Today, The Clearing House welcomed the Federal Reserve’s final total loss absorbing capacity (TLAC) rule.  The final rule requires designated global systemically important banks to maintain additional cushions of loss absorbing capacity and imposes new structural and legal requirements that together eliminate the risk of a future taxpayer bailout for any one of these firms.

“The TLAC requirement is the culmination of a legal and balance sheet revolution that has effectively ended ‘too big to fail,’” said Greg Baer, President of The Clearing House Association.  “As reflected in this week’s living wills announcements, this rule protects taxpayers by requiring U.S. G-SIBs to maintain enough loss-absorbing resources to be recapitalized during a resolution and ensure that any and all losses are borne by creditors and shareholders, and not the taxpayer.”


About The Clearing House: The Clearing House is a banking association and payments company that is owned by the largest commercial banks and dates back to 1853.  The Clearing House Payments Company L.L.C. owns and operates core payments system infrastructure in the United States and is currently working to modernize that infrastructure by building a new, ubiquitous, real-time payment system.  The Clearing House is the only private-sector ACH and wire operator in the United States, processing nearly $2 trillion in U.S. dollar payments each day, representing half of all commercial ACH and wire volume.  Its affiliate, The Clearing House Association L.L.C. is a nonpartisan organization that engages in research, analysis, advocacy and litigation focused on financial regulation that supports a safe, sound and competitive banking system.  

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