Canada is moving forward with plans to implement the global Total Loss-Absorbing Capacity (TLAC) framework on its domestically systemically important banks (D-Sibs). The rules, which require banks to hold enough bailin-able debt not to need government support during resolution, are expected to take effect in the first half of 2018.
Analysts expect the six D-Sibs to satisfy the incoming requirements with relative ease, by replacing their maturing senior notes with TLAC-eligible debt. Data collected by The Banker supports assertions that Canada’s banks are unlikely to struggle with the latest round of capital rules.
Their capital adequacy ratios – otherwise known as the Bank for International Settlement (BIS) ratios – are a good yardstick. These metrics all sit comfortably above the 8% minimum threshold set by Basel III.
Between 2015 and 2016 all the biggest banks increased their Tier 1 and Tier 2 capital buffers, with the exception of Royal Bank of Canada and National Bank of Canada, which saw their Tier 2 levels dip slightly.
All statistics sourced from www.thebankerdatabase.com
