FSB launches CCP resolution toolbox as global standard

  • FSB launches consultation on proposals for a set of resolution-specific resources and tools to support the resolution of a CCP.
  • Toolbox approach aims to ensure that adequate liquidity, loss-absorbing, and recapitalization resources and tools are available to maintain the continuity of critical functions should resolution of a CCP become necessary.
  • The FSB will monitor implementation for CCPs that are systemically important in more than one jurisdiction and publish findings in its annual Resolution Report.

The Financial Stability Board (FSB) published a consultation report on the financial resources and tools for central counterparty (CCP) resolution. It outlines means for promoting implementation of the resolution-specific toolbox approach as a global standard.

The report presents the outcome of the FSB’s qualitative analysis of a set of financial resources and tools for resolution: (i) bail-in bonds; (ii) resolution funds; (iii) resolution-specific insurance; (iv) resolution-specific third-party contractual support; (v) resolution cash calls; (vi) statutory or contractual variation margin gains haircutting for resolution; and (vii) equity in a first-loss position.

In this approach, home resolution authorities for systemically important CCPs should have access to a set of readily available resolution-specific resources and tools to support resolution, in addition to the use of available recovery resources and tools. Jurisdictions should disclose their approach to calibrating one or more of the resolution-specific resources in the resolution toolbox.

Read the full consultation

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