The views expressed in these remarks are those of the speaker in their role as Chair of FSB Resolution Steering Group and do not necessarily reflect those of the FSB or its members.
Ladies and Gentlemen, good morning,
It is a real pleasure to welcome you all today at this Financial Stability Board (FSB) ReSolve event.
I am particularly delighted that this event has finally become a reality. In fact, one of my priorities as the Chair of the Resolution Steering Group (ReSG) was to create more opportunities for the different Cross-Border Crisis Management (CBCMs) groups to come together, exchange experiences and learn from one another across sectors. Too often, we work within our own communities, despite facing many of the same challenges. Bringing together authorities responsible for banking, insurance and central counterparties in one forum was therefore an objective I felt strongly about, and I am very pleased to see it materialising today.
So, first of all, let me thank the Chairs of the three CBCM working groups and, of course, the colleagues at the FSB Secretariat for making this vision a reality.
This is a unique gathering. For the first time, resolution authorities and members of the different CBCMs are meeting in a truly cross-sectoral setting. That matters because financial crises do not respect sectoral boundaries, and neither should our preparedness.
We have learned over the years that crises rarely remain confined to one institution, one jurisdiction or one market. They spread. They create spillovers across borders, across markets and, increasingly, across industries.
Many of us in this room remember how the global financial crisis unfolded in 2008. Within a matter of weeks, the failure of Lehman Brothers triggered an unprecedented loss of confidence across the financial system. Funding markets froze, liquidity evaporated and panic spread rapidly across borders. Yet it soon became clear that the crisis was not confined to the banking sector. The rescue of AIG demonstrated that vulnerabilities in the insurance sector could also pose systemic risks with global consequences. AIG had built up massive exposures through credit default swaps, effectively providing insurance on structured credit products held widely across the banking system. As the value of those underlying assets deteriorated, AIG faced escalating collateral calls from its counterparties, creating acute liquidity pressures. The risk was not only the failure of a single firm, but the transmission of stress through its extensive network of counterparties, which included major global banks.
Authorities were simultaneously working to preserve the functioning of financial market infrastructures to prevent the disruption from spreading even further. At the time, few fully understood how these contagion channels would operate or how quickly stress could propagate across sectors. That experience reminds us that future crises may again emerge through unexpected channels, and that strengthening our preparedness is essential to reduce the risk of being caught by surprise.
This is even more true today as the interconnectedness that characterises the financial system has only increased, meaning that vulnerabilities can propagate in even more unexpected ways.
That reality requires us to think beyond our traditional boundaries. If crises spill over between countries and sectors, then our readiness must also extend beyond countries and sectors. We need to move from individual preparedness towards what I would call “joint readiness”.
That, ultimately, is the ambition of this event.
Over the next two days, we are not simply exchanging presentations or comparing legal frameworks. We are building a common understanding of the practical challenges we face. We are learning from each other’s experiences. We are strengthening relationships that will prove invaluable when decisions have to be made under pressure. And we are reinforcing the trust that effective crisis management ultimately depends upon.
Cross-sector dialogue is such an important part of this effort. Understanding how different sectors approach preparedness, operational continuity, communication, valuation or cross-border cooperation makes all of us better equipped to deal with complex crises that may not fit neatly within institutional or sectoral boundaries.
In fact, there is one question that I personally hope we will begin to tackle over the next two days. It is perhaps not the most comfortable question, but I believe it is one of the most important. We devote significant attention to making resolution workable within each sector. But do we sufficiently understand the consequences of a resolution across sectors? Could the resolution of a bank generate spillover effects that put an insurer or a central counterparty under stress? Equally, could distress or the resolution of an insurer or a financial market infrastructure have unintended consequences for banks?
These are difficult questions precisely because our objective is not simply to make individual resolution regimes work. It is to ensure that the financial system as a whole remains resilient. If there are cross-sector transmission channels, we need to understand them. If there are unintended consequences, we need to identify them. And if there are gaps in our preparedness, we need to address them before the next crisis tests us.
I do not expect us to answer all these questions over the next two days. But if this event enables us to start that conversation, to challenge some of our assumptions, to learn from one another and to deepen our understanding of cross-sector interdependencies, I would already consider it a great success.
This also brings me to another important point: readiness.
We often speak about legal frameworks, resolution plans and policy standards. These are, of course, essential. They are the foundation upon which effective resolution regimes are built.
But frameworks alone are not enough.
Readiness is where those frameworks become operational. It is where plans are tested against reality. It is where legal powers are translated into practical action. And it is where institutions demonstrate that they can respond effectively under compressed timelines, incomplete information and the pressure that inevitably accompanies a real crisis.
In other words, credibility is built before a crisis, not during one.
Every resolvability assessment completed, every operational capability strengthened, every obstacle identified and addressed, and every cross-border exercise conducted contributes to that credibility. Conversely, every unresolved impediment weakens the confidence that markets and authorities place in our frameworks.
This is why implementation matters so much.
In that sense, the Financial Stability Board has played a fundamental role in establishing the international standards that underpin modern resolution regimes. The recommendations agreed by the FSB have fundamentally strengthened our collective ability to manage financial crises while reducing moral hazard and protecting financial stability.
But those recommendations only achieve their purpose if they are implemented consistently and effectively.
And this is where I would like to recognise the extraordinary contribution made by all of you.
While the decisions and recommendations adopted by the FSB Plenary rightly receive significant attention, it is the daily work carried out within the CBCM working group, and back home of course, that keeps those standards alive.
In many respects, you are the guardians of the FSB’s Key Attributes.
Your work ensures that high-level principles are translated into operational reality. You identify practical challenges, test assumptions, improve coordination, strengthen cooperation across authorities and help jurisdictions implement internationally agreed standards in ways that are effective and credible.
This is painstaking work.
It is highly technical. It often happens behind the scenes. It requires persistence, expertise and an unwavering attention to detail.
Quite simply, the FSB Plenary, supported by the ReSG, provides the strategic direction, but it is your work that transforms international standards into operational reality.
On behalf of the Resolution Steering Group, I would therefore like to express my sincere appreciation and gratitude for everything you do. Your commitment is one of the main reasons why the international resolution framework continues to evolve and remains credible.
Over the next two days, I encourage all of you to make the most of this unique opportunity. Challenge each other. Share your practical experiences. Discuss not only what has worked well but also what has proved difficult. Some of the most valuable lessons come from understanding where implementation remains challenging and where collaboration can be strengthened.
If we leave this meeting with a deeper understanding of one another’s perspectives, stronger professional relationships and new practical insights that improve our collective preparedness, then this event will have achieved exactly what it set out to do.
Because ultimately, preparedness goes beyond trying to avoid incidents and crises. It is about assuming that they will happen and imagining solutions to fix them. This is a great forum to discuss just that!
And while crises may begin in one institution, it is impossible to know where they will go.
We must be ready together.
Thank you very much, and I wish you an engaging and productive ReSolve event.
