U.S. banks say global 'too-big-to-fail' plan is too strict

The proposal by the Financial Stability Board, a global group of regulators, would force big banks to have between 16 and 20 percent of their liabilities in equity and long-term bonds that can be written down in times of financial stress. The banks supported the idea of boosting their capital buffers - so-called Total Loss Absorbing Capacity, or TLAC - to more than what is required by the internationally agreed Basel III rules, they said in a letter to the FSB. "But our empirical analysis shows that a TLAC requirement calibrated even on the low end of the FSB’s proposed range is more than is needed," said Paul Saltzman, who heads the Clearing House Association, one of the groups. The letter was also signed by the Securities Industry and Financial Markets Association, the American Bankers Association and the Financial Services Roundtable.

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