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 Execution. The 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
Comment Due Date: February 02, 2018
Keywords: International, Banking, Resolution Planning, Bail-In, G-SIB, FSB
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