SEOUL, Nov 11 (Reuters) - The Financial Stability Board has agreed on a framework for dealing with "too big to fail banks", according to a letter seen by Reuters sent by Financial Stability Board chairman Mario Draghi.
In a letter to the Group of 20 leaders Draghi says the FSB has "agreed a policy framework, work processes and timelines for addressing the systemic and moral hazard risks associated with SIFIs (systemically important financial institutions)".
The letter sets out five key points, including the requirement that SIFIs, and "in particular global SIFIs" have additional loss absorbency capacity beyond the Basel rules on capital and liquidity.
However the letter does not specify what additional loss absorbency measures SIFIs would be subject to.
There has been debate over whether such banks should be subject to additional capital surcharges. (Writing by Rachel Armstrong; Editing by Alex Richardson)