FSB has published two guidance papers and three consultations as part of its policy to end “too big to fail” and work towards resolvability of all financial institutions that could be systemic if they fail. It has published:
- revised guidance on principles for cross-border effectiveness of resolution actions: these set out statutory and contractual mechanisms that jurisdictions should consider including in their legal frameworks to give cross-border effect to resolution actions in accordance with FSB’s Key Attributes of Effective Resolution Regimes for Financial Institutions;
- updated guidance on co-operation and information sharing with host authorities of jurisdictions where a global systemically important financial institution (G-SIFI) has a systemic presence that are not represented on its crisis management group (CMG): FSB says CMGs include only a limited number of authorities and it is critical for information to be shared more widely;
- consultation on the temporary funding needed to support the orderly resolution of a global systemically important bank (G-SIB): this consultation sets out principles to ensure G-SIBs have temporary funding to allow effective resolution without public sector bail-out. FSB aims to address the risk of banks having insufficient liquidity to maintain critical operations during a resolution and to promote private sector liquidity provision;
- consultation on arrangements to support operational continuity in resolution: this proposes arrangements to ensure continuity of critical shared services; and
- consultation on developing effective resolution strategies and plans for systemically important insurers: FSB has worked with IAIS on draft guidance to assist authorities in developing effective resolution strategies and plans for systemic insurers. It should also help CMGs of global systemically important insurers (G-SIIs) in their resolution planning work. The proposals incorporate guidance on the identification of critical insurance functions, reflecting the responses to a previous consultation.
The consultations close on 4 January 2016. (Source: FSB Resolvability Measures)