FSB published a report on the thematic review on bank resolution planning to support timely and consistent implementation of the principles of effective resolution regimes for financial institutions. The peer review finds that bank resolution planning frameworks have been adopted in most FSB jurisdictions, with planning most advanced for global systemically important banks (G-SIBs) and in jurisdictions that are home to them.
The review reveals that the range of banks subject to resolution planning varies widely and some of the requirements—for example, the frequency of resolution plan review, data reporting, and the content of plans—also tend to vary, particularly for banks other than G-SIBs or domestic systemically important banks (D-SIBs). Regardless of the progress made to date, the review stresses that important work remains to ensure that bank resolution plans can be put fully into effect and sets out key recommendations in the following areas:
- For FSB jurisdictions to take further steps to adopt and implement their resolution planning framework. This includes having powers to require banks to take measures to improve their resolvability; developing playbooks for executing resolution strategies; advancing work on resolution funding and valuation; and enhancing resolution-related cross-border cooperation and information sharing arrangements. Those jurisdictions identified in the report as not having a resolution planning framework should report to the FSB by June 2020 on actions undertaken, or planned, to adopt such a framework.
- For FSB to undertake work to support member authorities’ resolution planning for banks other than G-SIBs that could be systemic in failure.
- For FSB, working with relevant authorities and other bodies as appropriate, to promote the sharing of bank resolution planning experiences and practices in enhancing cooperation and information-sharing arrangements, particularly for non-G-SIBs and with non-crisis management group (CMG) host jurisdictions for G-SIBs.
The report describes the resolution planning frameworks and practices in FSB jurisdictions, including the progress since the second resolution peer review. It describes the steps that these jurisdictions have taken as part of resolution planning to develop resolution strategies, implement resolution plans, and address barriers to resolvability, also highlighting differences in approaches across jurisdictions and by types of banks that could be systemic in failure.
The report forms part of a series of peer reviews to support timely and consistent implementation of the FSB Key Attributes of Effective Resolution Regimes for Financial Institutions. The Key Attributes set out the core elements of effective resolution regimes that allow authorities to resolve financial institutions in an orderly manner without taxpayer exposure to loss, while maintaining continuity of their vital economic functions. The peer review evaluates the implementation by FSB jurisdictions of the resolution planning standard, as set out in the Key Attributes and in associated guidance. It focuses on resolution planning for all domestically incorporated banks that could be systemically significant or critical if they fail.
Keywords: International, Banking, Resolution Planning, Peer Review, Thematic Review, Systemic Risk, SIFI, FSB
APRA is consulting on the reporting standard for credit risk management (ARS 220.0).
FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).
ISDA launched the IBOR Fallbacks Supplement and the IBOR Fallbacks Protocol, with both becoming effective on January 25, 2021.
BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.
EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.
ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.
Ambassadors of EU member states agreed on the mandate of European Council on the Capital Markets Recovery Package, to support economic recovery from the COVID-19 crisis.