The Financial Stability Board (FSB) published today a peer review report on resolution regimes. This is the first in a series of peer reviews on resolution regimes, to support the timely and consistent implementation by FSB jurisdictions of agreed reforms in this area.
The global financial crisis demonstrated the urgent need to improve resolution regimes so as to enable authorities to resolve failing financial institutions quickly without destabilising the financial system or exposing taxpayers to loss from solvency support. Following the crisis, the FSB developed the Key Attributes for Effective Resolution Regimes for Financial Institutions as part of a set of agreed policy measures to address the moral hazard risks posed by systemically important financial institutions (SIFIs). The Key Attributes set out the core elements of effective resolution regimes that apply to any financial institution that could be systemically significant or critical if it fails. The peer review evaluates FSB jurisdictions’ existing resolution regimes and any planned changes to those regimes using the Key Attributes as a benchmark, and makes recommendations to promote further implementation.
More on the new publication can be found here.