Jin Rong Shi Bao·2025-07-22 01:00Core Viewpoint - The issuance of Total Loss-Absorbing Capacity (TLAC) bonds by China's globally systemically important banks (G-SIBs) is a proactive measure to enhance their loss absorption capabilities and align with international regulatory standards [1][3][6] Group 1: TLAC Bond Issuance - Three out of five G-SIBs in China have issued TLAC non-capital bonds to improve their total loss absorption capacity [1] - The first bank to issue TLAC bonds in 2025 was Bank of Communications, followed by Agricultural Bank of China and Bank of China, with respective issuance amounts of RMB 300 billion, RMB 500 billion, and RMB 400 billion [2] - The approved issuance limits for the banks are RMB 600 billion for Industrial and Commercial Bank of China, RMB 1800 billion for Agricultural Bank of China, RMB 1500 billion for Bank of China, and RMB 3000 billion for Bank of Communications [2] Group 2: Regulatory Framework and Compliance - The People's Bank of China, along with other regulatory bodies, established a TLAC management framework in October 2021, requiring G-SIBs to meet specific external TLAC ratio requirements by 2025 and 2028 [4] - Regulatory measures include improving the issuance, trading, and disposal rules for TLAC bonds, as well as establishing a dynamic monitoring mechanism for TLAC ratios [4][5] Group 3: Market Impact and Strategic Significance - The issuance of TLAC bonds is seen as a milestone for China's financial system, enhancing the banks' capital and risk management capabilities while increasing the variety of credit bonds available in the domestic market [5] - Meeting TLAC requirements is crucial for the international development of the five major banks, reflecting their commitment to global financial standards and enhancing China's banking sector's international reputation [6]