Guiding principles on the temporary funding needed to support the orderly resolution of a global systemically important bank (“G-SIB”)
These guiding principles for the temporary funding of global systemically important banks (G-SIBs) in resolution seek to address the risk of banks having insufficient liquidity to maintain the continuity of critical functions in resolution. They are intended to ensure that temporary funding is available to enable the effective resolution of G-SIBs without bail-out by the public sector. The guiding principles focus on ways to encourage and maintain as much private sector funding as possible to the firm in resolution; the roles and types of public sector backstop mechanisms for providing temporary liquidity to support the orderly resolution of a G-SIB; and elements of public sector backstop mechanisms that support the minimisation of moral hazard risks.
The guiding principles complement the FSB’s Key Attributes, which provide a policy framework for the resolution of systemically important firms.