Treasury is consulting on a possible extension of its recovery and resolution regime to four further market sectors:

  • investment firms and parent undertakings of these firms and banks;
  • CCPs;
  • non-CCP financial market infrastructures (non-CCP financial market infrastructures); and
  • insurers.

It has looked at the potential economic cost of allowing systemically important non-bank financial institutions to fail and has decided to accelerate its project to address the resolution of these entities. It considers how the European Commission and international regulators and standard setters plan to address non-bank financial institutions. The paper makes proposals for extending parts of the bank regime to the first three categories above. For insurers, it thinks a comprehensive review of the current insolvency framework that applies to insurers is a necessary first step towards a possible new resolution regime. Treasury seeks comments by 24 September. (Source: Financial Sector Resolution: Broadening the Regime)