Thematic Review on Resolution Regimes
The global financial crisis demonstrated the urgent need to improve resolution regimes so as to enable authorities to resolve failing financial institutions (FIs) quickly without destabilising the financial system or exposing taxpayers to loss from solvency support. Following the crisis, the FSB published the Key Attributes of Effective Resolution Regimes for Financial Institutions as part of the package of policy measures to address the moral hazard risks posed by systemically important financial institutions. The Key Attributes (KAs) set out the core elements of effective resolution regimes that apply to any financial institution that could be systemically significant or critical if it fails.
Resolution regimes have been identified as a priority area by the FSB. As a result, the implementation of the KAs by FSB member jurisdictions will undergo intensive monitoring and detailed reporting. To ensure timely and effective implementation, the FSB will carry out an iterative series of peer reviews on the implementation of the KAs.
The objective of this first peer review is to evaluate FSB jurisdictions’ existing resolution regimes and any planned changes to those regimes using the KAs as a benchmark. The review compares national resolution regimes both across individual KAs (focusing primarily on KAs that cover core provisions of those regimes) and across different financial sectors (banking, insurance, securities, and financial market infrastructure). It provides recommendations for future work by the FSB and its members in support of an effective and credible resolution regime for Systemically Importance Financial Institutions (SIFIs), which is a critical component of the policy framework for ending too-big-to-fail.