Verlustabsorptionsmechanismen

Verlustabsorptionsvermögen (loss-absorbing capacity) refers to the capacity of a bank or financial institution to absorb losses through a combination of equity capital and loss-absorbing liabilities that can be written down or converted into equity in a resolution or during distress. The term is used in German and English alike, often as Verlustabsorptionsvermögen or loss-absorbing capacity in regulatory contexts.

Regulatory context: It is a central element of modern bank resolution regimes. International standards such as Total Loss-Absorbing Capacity (TLAC) apply to globally systemically important banks, while the European Union uses the Minimum Requirements for Own Funds and Eligible Liabilities (MREL) to ensure adequate loss absorption for banks within the EU. The aim is to enable recapitalization or orderly resolution without relying on public funds.

Composition and operation: Loss-absorbing capacity is provided by eligible equity capital (primarily core tier 1) and by certain eligible loss-absorbing liabilities that can be bailed in or converted to equity in a resolution. In a crisis, these instruments can be written down or converted to maintain essential functions and to recapitalize the institution. The adequacy of loss-absorbing capacity is assessed relative to regulatory metrics such as risk-weighted assets or total liabilities, with jurisdictional differences in eligibility criteria and minimum levels.

Limitations: Measuring loss-absorbing capacity is complex and can be procyclical; reliance on market-based instruments may be affected by conditions. Ensuring enforceability of bail-in provisions and effective coordination with other resolution tools remain essential.