Jin Rong Shi Bao·2025-08-08 07:59Core 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-absorbing 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 regulatory framework in October 2021, requiring G-SIBs to meet specific external TLAC ratio requirements by early 2025 and 2028 [4] - Banks are encouraged to develop detailed timelines and strategies for achieving TLAC compliance, alongside optimizing capital management [4][5] Group 3: Market Impact and Strategic Importance - 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] - Achieving TLAC compliance is viewed as essential 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]