Deployment of Unallocated Total Loss-Absorbing Capacity (uTLAC): Considerations for Crisis Management Groups (CMGs)

The TLAC standard is designed to ensure that failing G-SIBs have enough loss-absorbing and recapitalization capacity available during resolution. uTLAC refers to TLAC resources that are not distributed to material sub-groups beyond what is needed to cover risks on the resolution entity’s solo balance sheet.
uTLAC serves as a pool of readily available and fungible resources for the resolution entity. It can be flexibly used to address capital shortfalls at the resolution entity level, material sub-groups, or any other direct or indirect subsidiary in accordance with the resolution strategy.
The objective of the present report is to be transparent regarding considerations developed for CMGs and to assist home and host authorities in discussions about the form, location, and deployment of uTLAC resources in resolution planning. For effective coordination among authorities and implementation of the preferred resolution strategy, home and host authorities need to be assured that uTLAC resources are readily available and deployable during resolution.
The report identifies corresponding assets in which uTLAC is held and analyzes their deployment, especially in a cross-border context. It also highlights potential legal, regulatory, and operational challenges that may arise, which can vary depending on the form, location, and deployment mechanisms of uTLAC resources.
This report therefore aims to facilitate CMG discussions on uTLAC resources as part of G-SIBs‘ resolution planning while providing flexibility for CMGs to prioritize pertinent topics. Additionally, it seeks to inform the public and enhance understanding of the FSB’s work on uTLAC. Howewer, the considerations in this report are not guidance or guidelines for G-SIBs, nor do they propose any preferred approach for CMGs. The report does not alter or supersede the FSB’s TLAC Principles and Term Sheet or Guiding Principles in any manner.
In 2023 and 2024, CMGs are requested to inform the FSB of their experiences with discussions based on the set of considerations outlined in this report.