FSB Resolution Report Preparedness

On Nov. 18, FSB issued report, said preparedness is key priority.

  • FSB issued report on progress implementing policy measures to enhance resolvability of systemically important financial institutions, and need for resolution preparedness.
  • Also discussed lessons learnt from Covid-19 crisis, which confirmed the importance of ongoing work on resolvability, including for central counterparties (CCPs).
  • Banks
  • Report noted global systemically important banks (G-SIBs) are estimated to already meet final 2022 minimum external total loss absorbing capacity (TLAC) requirement.
  • TLAC-eligible bond issuance has continued through the difficult Covid-19 pandemic environment, and the market has so far absorbed issuance without difficulty.
  • Disclosure of external TLAC levels by G-SIBs has improved over the past year.
  • But there is still little information available on distribution of TLAC in banking groups.
  • Work is ongoing on management, distribution and transferability of these resources.
  • Central Counterparties
  • Recent market turmoil showed benefits of central clearing for global financial stability.
  • CPMI, IOSCO joint review qualified 13 CCPs as systemically important in more than one jurisdiction, most authorities established crisis management groups for the CCPs.
  • And commenced resolution plans, to support CCP resolvability discussions, adequacy of financial resources for resolution, FSB issued guidance on financial resources to support CCP resolution, and treatment of CCP equity in resolution (see #77037).
  • Chairs of FSB, CPMI, IOSCO and FSB Resolution Steering Group agreed to collaborate on, conduct further work on CCP financial resources through respective committees.
  • Insurance
  • FSB continues to monitor implementation of key attributes for the insurance sector.
  • Progress on implementation of national insurance resolution regimes slowed, no major reforms, such as finalized new/enhanced insurance resolution frameworks, reported.
  • Several jurisdictions identified systemically important insurers for recovery, resolution planning, key focus areas are intra-group interconnectedness, funding in resolution.

Regulators FSB
Entity Types B/D; Bank; BHC; Depo; Exch; Ins; OTC; SIFI
Reference Rp, PR 11/18/2020; COVID-19
Functions Compliance; Financial; Legal; Operations; Reporting; Research; Resolution; Risk; Settlement; Trade Reporting; Trading; Treasury
Countries Global Regulator
Products Banking; Clearing; Corporate; Derivatives; Fixed Income; Forex; Insurance; Securities
Regions Global
Rule Type Guidance
Rule Date 11/18/2020
Effective Date 11/18/2020
Rule Id 91159
Linked to
Reg. Last Update 11/18/2020
Report Section International

Last substantive update on 11/20/2020