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Applauding the Fed's Finalization of Key Financial Reform TLAC Rule

Thursday, December 15, 2016
Contact: Nick Jacobs, 202-618-6430 or njacobs@bettermarkets.com


Washington, D.C. – Dennis Kelleher, President and CEO of Better Markets, issued this statement following the release by the Federal Reserve Board of its Total Loss Absorbing Capacity (TLAC) rule:

"We applaud the Federal Reserve Board’s finalization of the total loss absorbing capacity (TLAC) rule.  While more capital than debt and higher amounts of both would be optimal, this is nevertheless another important rule in completing the financial reform architecture designed to prevent financial crashes and taxpayer bailouts.  Governor Tarullo, in particular, deserves recognition for his work on this rule and for his years of steadfast leadership in implementing financial reform.

"Finalization of the rule today, however, is only the beginning.  As witnessed in Slovenia and more recently with Deutsche Bank and certain Italian banks, careful monitoring of loss absorbing debt will be necessary to minimize unintended consequences and maximize its utility if and when needed.  For example, regulators must closely scrutinize the trigger mechanisms, the pricing, the trading and the composition of the purchasers and holders of the convertible debt to assess the likelihood that it will work as intended in an actual crisis."


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.com.

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