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November 30, 2017

FSB is consulting on two proposals for guidance on the implementation of particular aspects of its Key Attributes of Effective Resolution Regimes for global systemically important banks (G-SIBs). The two subjects of consultation constitute principles on bail-in execution and funding strategy elements of an implementable resolution plan. This guidance is intended to support the application of the overall policy framework to end “too-big-to-fail.” The consultations end on February 02, 2018.

Consultation on Principles on Bail-in ExecutionThe consultative document proposes a set of principles to assist authorities as they make G-SIB bail-in resolution strategies operational. The principles cover the following:

  • Disclosures on the instruments and liabilities within the scope of bail-in
  • Valuations to inform and support the application of bail-in
  • Processes to suspend or cancel the listing of securities, to notify creditors, and to deliver new securities or tradable certificates following the entry into resolution
  • Securities law and securities exchange requirements during the bail-in
  • Processes for transferring governance and control rights and establishing a new board for the firm in resolution
  • Market and creditor communications

Consultation on Funding Strategy Elements of an Implementable Resolution Plan. This consultative document sets out proposed guidance on the development of a plan for funding in resolution. The guidance builds on the FSB’s August 2016 Guiding Principles on the temporary funding needed to support the orderly resolution of a global systemically important bank (G-SIB) and on the existing supervisory and resolution guidance on liquidity risk management and resolution planning. It identifies a set of key funding strategy elements covering the following:

  • A firm’s capabilities to support monitoring, reporting and estimating funding needs in resolution and to facilitate execution of the funding strategy
  • The development of a resolution funding plan by the authorities
  • The use of firm assets and private sources of funding
  • Access to temporary public sector backstop funding mechanisms and ordinary central bank facilities
  • Information sharing and coordination between authorities

 

Related Links

Comment Due Date: February 02, 2018

Keywords: International, Banking, Resolution Planning, Bail-In, G-SIB, FSB

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