pc
nid 92547
May 15, 2026
pthandapani@vixio.com
Singapore
Monetary Authority of Singapore
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1677 charsSingapore's Monetary Authority Launches Consultation on Total Loss Absorbing Capacity Requirements for Domestic Systemically Important Banks
On May 13, 2026, the Monetary Authority of Singapore (MAS) published a consultation paper seeking feedback on proposed Total Loss Absorbing Capacity (TLAC) requirements for Domestic Systemically Important Banks (DSIBs) in Singapore.
The consultation paper outlines a proposed framework to impose TLAC requirements on DSIBs and includes draft amendments to the Financial Services and Markets Act 2022 (FSMA) that will provide MAS with statutory powers to establish and enforce these requirements. TLAC requirements are designed to ensure that systemically important banks maintain sufficient loss-absorbing capacity to support financial stability and enable orderly resolution in stress scenarios. The framework applies specifically to banks designated as systemically important to Singapore's financial system. The proposed amendments to the FSMA will establish the legal basis for MAS to set out detailed TLAC requirements through regulatory instruments.
The consultation period runs from May 13, 2026 to June 12, 2026, closing at 11:59 PM on the final date. Responses should be submitted in accordance with MAS's consultation procedures. The consultation paper is accompanied by draft amendments to Division 3, Part 7 of the FSMA, which stakeholders are invited to review and comment on. Following the close of the consultation period, MAS will review all feedback received before finalising the TLAC framework and associated legislative amendments.
**References:**
Monetary Authority of Singapore. (2026, May 13). Consultation Paper on Proposed Total Loss Absorbing Capacity Requirements for Domestic Systemically Important Banks in Singapore. Retrieved from MAS website.
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1609 charsMonetary Authority of SIngapore Launches Consultation on Total Loss Absorbing Capacity Requirements for Domestic Systemically Important Banks
The Monetary Authority of Singapore (MAS) has released a consultation paper proposing a framework to impose total loss absorbing capacity (TLAC) requirements on domestic systemically important banks (DSIBs) in Singapore.
The consultation paper proposes:
TLAC requirements and scalars stipulating an external TLAC requirement of 14 percent of risk-weighted assets (RWA) for local bank DSIBs (without a leverage ratio requirement), and introducing internal TLAC requirements for foreign bank DSIBs calibrated at 75-90 percent of their standalone external TLAC (which is set at 18 percent RWA for those part of a GSIB and 14 percent for those that are not).
Instrument eligibility and exclusions detailing strict criteria for TLAC instruments—including being fully paid in, unsecured, and containing mechanisms for write-down or equity conversion—while explicitly excluding retail investors in Singapore from holding these instruments and prohibiting the use of CET1 capital already allocated for the capital conservation buffer.
Implementation and disclosures proposing a five-year implementation timeline from the date of notification for DSIBs to meet their TLAC requirements, and mandating quarterly or semi-annual disclosures of key prudential TLAC metrics to provide clarity on the creditor hierarchy in resolution scenarios.
Statutory amendments outlining proposed amendments to the Financial Services and Markets Act 2022 (FSMA) to provide MAS with the statutory powers necessary to impose these TLAC requirements.
Feedback on these proposals may be submitted via this FormSG link by June 12, 2026.