FSB published a summary of responses received to consultation on the solvent wind-down of the derivatives and trading book portfolio of a global systemically important bank (G-SIB). After carefully considering the comments and the fact that solvent wind-down of derivatives and trading portfolios capabilities differ across jurisdictions, FSB has decided not to develop further guidance on the solvent wind-down of derivatives and trading portfolios at this stage. FSB will continue to promote solvent wind-down of derivatives and trading portfolios planning as part of overall resolution planning.
The discussion paper sought comments on the possible future guidance, along with the rationale, for solvent wind-down of derivatives and trading portfolios planning. The discussion paper identified the capabilities of firms that are necessary to support solvent wind-down of derivatives and trading portfolios, including the ability to perform the analysis necessary to support the preparation of a wind-down plan along with timely assessment and analysis to be undertaken to support decision-making by management and authorities, as a firm prepares for execution and executes the plan. The consultation was launched in June 2019, with the comment period on the consultation ending on August 02, 2019. Six industry groups commented on the discussion paper, with some of the responses being consolidated efforts and resulting in FSB receiving three comment letters for the publication. Respondents generally opined that further guidance, if any, should be considered in a way that would limit or reduce regulatory divergence, acknowledge differing business models, and be principles-based and capabilities-focused.
Keywords: International, Banking, Resolution Planning, G-SIB, Solvent Wind-Down, Derivatives, Recovery and Resolution, Trading Book, Systemic Risk, Responses to Consultation, FSB
Previous ArticleFSB Not Planning Further Guidance on Resolution Planning Disclosures
The European Commission (EC) published the Delegated Regulation 2021/1527 with regard to the regulatory technical standards for the contractual recognition of write down and conversion powers.
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to provide guidance to authorized deposit-taking institutions on the interpretation of APS 120, the prudential standard on securitization.
The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022.
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.
The European Banking Authority (EBA) published the final report on the guidelines specifying the criteria to assess the exceptional cases when institutions exceed the large exposure limits and the time and measures needed for institutions to return to compliance.
The Prudential Regulation Authority (PRA) issued the policy statement PS20/21, which contains final rules for the application of existing consolidated prudential requirements to financial holding companies and mixed financial holding companies.
The European Banking Authority (EBA) revised the guidelines on stress tests to be conducted by the national deposit guarantee schemes under the Deposit Guarantee Schemes Directive (DGSD).
The European Commission (EC) announced that Nordea Bank has signed a guarantee agreement with the European Investment Bank (EIB) Group to support the sustainable transformation of businesses in the Nordics.
The Hong Kong Monetary Authority (HKMA) issued a circular, for all authorized institutions, to confirm its support of an information note that sets out various options available in the loan market for replacing USD LIBOR with the Secured Overnight Financing Rate (SOFR).
The Office of the Comptroller of the Currency (OCC) issued a new "Problem Bank Supervision" booklet of the Comptroller's Handbook. The booklet covers information on timely identification and rehabilitation of problem banks and their advanced supervision, enforcement, and resolution when conditions warrant.