FSB publishes resolution regime standards

 FSA has set out its standards for “key attributes” of effective resolution regimes. The standards require each jurisdiction to:

• designate resolution authorities with powers to intervene and resolve non-viable institutions using a number of tools, including bail-in within resolution;
• provide incentives for cross-border cooperation to get the best outcome for financial stability for jurisdictions affected by a financial institution’s failure;
• make sure all G-SIFIs have RRPs that are regularly reviewed and updated, and which are also rigorously tested each year; and
• put in place “crisis management groups” appropriate for each G-SIFI, involving relevant regulators and underpinned by cooperation agreements.

A peer review of implementation will start during 2012, and authorities, like the first group of G-SIFIs, will have to meet resolution planning requirements by the end of 2012. (Source: FSB Publishes Key Attributes of Effective Resolution Regimes for Financial Institutions)