Asia banks may face new capital adequacy rules

Hong Kong

ASIAN banks are bracing for the impact of new capital adequacy rules, even if the region's regulators choose not to follow global proposals on total loss-absorbing capacity, or TLAC. Lenders in Asia have been largely exempt from the debate raging in Europe and the US over TLAC capital buffers, which aim to prevent taxpayer-funded bailouts of banks deemed too big to fail.

Regulators in the region have yet to announce formal TLAC instructions, but many bankers say they expect Asia to adopt them in some form in the coming years to align their standards with the rest of the world. "It may also trickle down to us here in Asian countries when our regulators are ready to adopt some of these practices," said Wong Yee Fun at Maybank. "We are definitely keeping ourselves in the loop to know what the potential impact would be for us."