This FSB report commemorates the tenth anniversary of the FSB Key Attributes of Effective Resolution Regimes for Financial Institutions (“Key Attributes”), whose main aim was to address the potential issue of “Too Big To Fail” institutions.
According to the FSB, the 3 main axis for further progress are:
- Banks – Important work remains to improve the resolvability of global systemically important banks. Work continues on allocation of Total Loss-Absorbing Capacity (TLAC) resources within groups, G-SIBs’ capabilities for access to funding in resolution, valuation and continuity of access in resolution to financial market infrastructures (FMIs). Cross-border issues remain to be addressed for instance in relation to funding in resolution and bail-in execution. The FSB will soon publish a practices paper that summarises the issues on the latter.
- Central Counterparties (CCPs) – Uncertainty remains around the resolvability of CCPs given their systemic role in the financial system. A preliminary analytical report on CCP financial resources will be published in early 2022 and will inform options for potential new or revised international policy on the use, composition or amount of financial resources for CCP recovery or resolution.
- Insurers – Progress on resolution reforms and resolution planning implementation in the insurance sector has been mixed. As in prior years, some jurisdictions have identified systemically important insurers and/or internationally active insurance groups. Work on resolution planning and resolvability assessments for these institutions has started or is under way. The FSB will soon publish two papers that present practices regarding financial and operational interconnectedness in resolution planning and funding in resolution.
The FSB report can be found here: https://www.fsb.org/2021/12/2021-resolution-report-glass-half-full-or-still-half-empty/