2020 Resolution Report: “Be prepared”
Resolution preparedness remains a key priority.
This report updates on progress in implementing policy measures to enhance the resolvability of systemically important financial institutions and highlights the need for resolution preparedness. It also discusses lessons learnt from the COVID-19 pandemic, which confirmed the importance of ongoing work on resolvability, including for central counterparties (CCPs).
Banks – Global systemically important banks (G-SIBs) are estimated to already meet the final 2022 minimum external total loss absorbing capacity (TLAC) requirement. While disclosure of external TLAC levels by G-SIBs has improved over the past year, little information is available to market participants on the distribution of TLAC within banking groups. Work is ongoing on the management, distribution and transferability of these resources.
CCPs – Recent periods of market turmoil have demonstrated the benefits that central clearing brings for global financial stability. A review by the CPMI and the IOSCO qualified thirteen CCPs as systemically important in more than one jurisdiction. Enhancing the resilience of CCPs remains an FSB priority.
Insurance – Progress on implementation of national insurance resolution regimes has slowed down, with no significant reforms, such as finalisation of new or enhanced insurance resolution frameworks, reported in this recent cycle. A number of jurisdictions have identified systemically important insurers for purposes of recovery and resolution planning. Key areas of attention for FSB work on resolution planning for insurers are intra-group interconnectedness and funding in resolution.