An international push to make bank resolutions viable is putting economic valuations of bank balance sheets front and center. The Financial Stability Board identified the issue as within “remaining obstacles to resolvability” (FSB, 2015). Now, regulators are getting specific about what they expect from banks and the repercussions if they fail to do so. Here, we set out the challenges and give guidance on best-practice methodologies to resolve them.
The paper is split into two sections. We start by setting out why valuation
features as an important part of a resolution framework and explore what is
meant by Economic Value. We then move on to recent regulatory
developments and cover best-practice solutions.
Download the 'Removing the ‘Barrier’ of Valuation in Bank Resolutions' paper to find out more.