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
Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.
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