The Financial Stability Board (FSB) has published two final guidance papers to assist the resolution planning work of authorities and firms:
- guiding principles on the temporary funding needed to support the orderly resolution of a global systemically important bank (G-SIB). The guiding principles seek to address the risk of banks having insufficient liquidity to maintain critical operations during a resolution. They are intended to ensure that temporary funding is available to enable the effective resolution of G-SIBs without bail-out by the public sector; and
- guidance on arrangements to support operational continuity in resolution. The guidance sets out arrangements to support the continuity of critical shared services, such as information technology infrastructure and software-related services, that are necessary to maintain a firm’s critical functions in resolution.
The FSB has also published its fifth report to the G20 on progress in resolution, Resilience through resolvability – moving from design to implementation. The report reviews what has been achieved so far and sets out further actions to fully implement the FSB’s Key Attributes of Effective Resolution Regimes for Financial Institutions (Key Attributes) and ensure that all G-SIFIs are resolvable. It also reports the findings from the second round of the Resolvability Assessment Process (RAP) for G-SIBs and the initial results from the first RAP for global systemically important insurers (G-SIIs).
The FSB has also identified the following priorities for the remainder of 2016 and 2017 to help further advance progress:
- develop further guidance on central counterparty (CCP) resolution, building on the recently published discussion paper on Essential Aspects of CCP Resolution Planning which identifies elements that are considered to be core to the development of effective resolution strategies and plans for CCPs;
- finalise the remaining elements of the total loss-absorbing capacity (TLAC) standard, including guidance on the implementation of internal TLAC and final proposals on TLAC holdings and TLAC disclosures;
- develop further guidance to support the resolution planning work of authorities and firms, including on ways in which access to financial market infrastructures can be maintained in resolution and on the operational execution of bail-in; and
- develop a Key Attributes assessment methodology for insurers and monitor implementation of the guidance on Developing Effective Resolution Strategies and Plans for Systemically Important Insurers.
View FSB guidance on arrangement to support operation continuity in resolution, 18 August 2016
View FSB fifth report to G20 on progress in resolution, 18 August 2016