Today the FDIC and the Bank of England announced their agreement to a memorandum of understanding (MOU) reflecting the shared commitment by the FDIC and the Bank of England to work together to a greater extent when they act as resolution authorities with respect to troubled financial institutions that operate in both the United States and the United Kingdom, including "planning for resolution scenarios, and appropriate simulations, contingency planning or other work designed to improve preparations … for managing and resolving crises involving Firms with cross-border operations." The MOU also emphasizes the need for the FDIC and the Bank of England to work more closely with other regulatory authorities in both countries and with regulated firms themselves "in planning the development of appropriate (going-concern) recovery plans and (gone-concern) resolution plans."
FDIC Chairman Sheila Bair stated, "The recent financial crisis demonstrates that greater international coordination among resolution authorities as well as resolution processes capable of resolving the largest, most complex financial institutions are necessary to protect the public." Bair went on to state that this MOU "is an invaluable step forward." Bank of England Governor Mervyn King stated that "A key legislative response in the United Kingdom to the recent financial crisis has been the adoption of a special resolution regime that enables failed UK banks to be resolved in the public interest. The Bank of England has in consequence become a resolution authority in the United Kingdom and, as such, it makes good sense to develop close relationships with other resolution authorities so that the toolkit and powers now available to us can be applied effectively to large and complex cross-border banks."