By William Schomberg
Sept 25 (Reuters) - Global regulators reached a draftagreement Friday on a rule on stopping banks being "too big tofail", by requiring them to hold enough equity capital and bondsto avoid taxpayers being called on in a crisis.
The proposed rule is known as total loss absorbency capacityor TLAC, and is considered to be the last major reform after the2007-09 financial crisis forced governments to shore up lenders.
The rule will apply to nearly all the 30 big banks the FSBhas already deemed to be "globally systemic" such as GoldmanSachs, Deutsche Bank and HSBC.
"At today's meeting FSB members discussed the TLAC impactassessments, and agreed the draft final principles and theupdated term sheet," the Financial Services Board (FSB) said ina statement.
FSB said members support consistent implementation of thisrobust minimum standard, adding that the TLAC standard and itstimelines will be finalised by the time of the G20 Summit inNovember.
FSB will make policy recommendations based on its assessmentof whether existing or additional policy measures could mitigatepotential risks.
The first version of the Higher Loss Absorbency standard,which requires the Global Systemically Important Insurers(G-SIIs) to hold extra buffer on top of the basic capitalrequirements, was greenlighted by the FSB.
Role of compensation, corporate governance frameworks andregulatory enforcement in reducing employee misconduct were alsoreviewed by the FSB. (Additional reporting by Ankush Sharma in Bengaluru; Editing byBernard Orr)