The world's largest banks will have to build up theirloss-absorbing liability buffers to see them through a crisis, asregulators tackle too-big-to-fail lenders six years after thecollapse of Lehman Brothers Holdings Inc.

The Financial Stability Board (FSB), led by Bank of EnglandGovernor Mark Carney, said today that the biggest banks may berequired to have total loss-absorbing capacity equivalent to asmuch as a quarter of their assets weighted for risk, with nationalregulators able to impose still tougher standards. The FSB isseeking comment on the rule, known as TLAC, which would apply atthe earliest in 2019.

The plans are a “watershed” in regulators' mission to end thethreat posed by banks whose size and systemic importance mean theirfailure would be catastrophic for the global economy, Carney toldreporters today in Basel, Switzerland. “The outlines of how we aregoing to end too-big-to-fail are here.”