Bail-in within resolution is a core part of resolution strategies of global systemically important banks (G-SIBs). It refers to the write-down and/or conversion of liabilities into equity and helps implement a creditor-financed recapitalisation as part of an orderly resolution that minimises impacts on financial stability, ensures the continuity of critical functions, and avoids exposing taxpayers to loss.
This consultative document proposes a set of principles to assist authorities as they make G-SIB bail-in resolution strategies operational. The principles cover:
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disclosures on the instruments and liabilities within the scope of bail-in;
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valuations to inform and support the application of bail-in;
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processes to suspend or cancel the listing of securities, to notify creditors, and to deliver new securities or tradeable certificates following the entry into resolution;
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securities law and securities exchange requirements during the bail-in;
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processes for transferring governance and control rights and establishing a new board for the firm in resolution; and
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market and creditor communications.
The FSB welcomes comments and responses to the questions set out in the consultative document by Friday, 2 February 2018. Responses should be sent to [email protected] with “Principles on Bail-in Execution” in the subject line. Responses will be published on the FSB website unless respondents expressly request otherwise.