At their February meeting this year, the G20 Finance Ministers and Central Bank Governors reiterated their commitment to ensure that all global systemically important financial institutions (G-SIFIs) are resolvable, and requested a report on progress.
Authorities have made continued efforts to develop resolution strategies and operational plans for all G-SIFIs and to introduce resolution powers and tools consistent with the
Key Attributes of Effective Resolution Regimes for Financial Institutions (“Key Attributes“) endorsed by the G20 at Cannes. As shown by the FSB’s recent peer review, substantial headway was made in the US with the adoption of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd Frank Act”) and there have been refinements to resolution regimes in other FSB jurisdictions, including in Australia, Germany, France, Netherlands, Spain, Switzerland and the UK.1 Further legislative measures are necessary to implement the Key Attributes fully and to put in place the powers and arrangements for cross-border cooperation and recognition of resolution measures needed to make resolution strategies and plans operational. The adoption and implementation of the EU’s Recovery and Resolution Directive will be a significant step in this direction since the EU is home to a number of G-SIFIs. It is important that both home and host countries to G-SIFIs have the necessary resolution tools and the capacity to cooperate across borders to resolve these institutions without systemic disruption and without exposing taxpayers to loss. Continue reading