Exclusive - G20 finalising flexible 'bail in' bond deal for big banks: sources | WHAT REALLY HAPPENED

Exclusive - G20 finalising flexible 'bail in' bond deal for big banks: sources

(Reuters) - The world's biggest banks may be able to count surplus capital towards new buffers of special bonds being imposed by regulators, two sources familiar with draft proposals said.

In order to secure a deal the regulators have agreed to a more flexible approach to cater for differences in banking models across the world, both sources said.

The proposed new rule for the world's biggest banks is part of a wider plan for making banks safer after governments had to shore up lenders during the 2007-09 financial crisis.

The new buffers, known as "gone concern loss absorption capacity" or GLAC, are being drafted by the Financial Stability Board (FSB), the regulatory task force of the Group of 20 economies, and at meetings this week there was progress on agreeing core elements for the G20 summit in November to endorse said the sources.

Regulators have now agreed in principle that capital banks hold above minimum global requirements could be counted towards the GLAC figure, the sources said on Thursday.

"The aim is to think of it as one stack rather than separate capital and GLAC," one source said.

Webmaster's Commentary: 

Behind all the deliberate obfuscation what they are planning is to allow banks to grab deposits from savings accounts and replace them with special bonds, which will be worthless when the banks collapse anyway.

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