The Financial Stability Board (FSB) has published its second thematic review on resolution regimes. The thematic review examined the range and nature of resolution powers available to authorities for the banking sector in FSB jurisdictions, as well as any requirements for recovery and resolution planning and resolvability assessments for domestically incorporated banks.
Key points in the review include:
- only a subset of the FSB membership – primarily home jurisdictions of global systemically important banks – currently have a bank resolution regime with a comprehensive set of powers broadly in line with the FSB’s Key Attributes of Effective Resolution Regimes for Financial Institutions;
- while resolution regimes generally apply to all types of commercial banks, the coverage of holding companies of banks, branches of foreign banks and material non-regulated operational entities within a financial group is more variable across FSB jurisdictions; and
- there is significant variation across FSB jurisdictions in the conditions for the use of resolution powers and their level of detail.
The review also sets out a number of recommendations from the FSB to address some of the identified gaps. These include:
- introducing missing powers in bank resolution regimes;
- reviewing and extending as necessary the scope of their regimes;
- introducing recovery and resolution planning requirements for all banks that are potentially systemic in failure; and
- adopting powers to require banks to take measures to improve their resolvability.
View FSB second thematic review on resolution regimes, 18 March 2016