Regulators lean towards contractual bail-in for China TLAC
New legislation would not be required, but weak bankruptcy law could unnerve investors
China’s biggest banks may be permitted to issue new bail-in debt by inserting a contractual clause in the offer documents, allowing them to start building their buffers faster than originally expected.
Chinese regulators have already begun to consult with the largest banks on the options available for defining the total loss absorbing capacity (TLAC) framework, and in January they issued a letter promising to look at ways to broaden the number of domestic investors who would be attracted to
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