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Financial Stability Board Seeks Input on G-SIB Resolution Planning

The Financial Stability Board (FSB) issued for consultation two proposals for guidance on the implementation of its Key Attributes of Effective Resolution Regimes for global systemically important banks (G-SIBs), designed to address the “too-big-to-fail” institutions.

First is the consultation on Principles on Bail-in Execution referring to the write-down and/or conversion of liabilities into equity and helps implement a creditor-financed recapitalization as part of an orderly resolution that minimizes impacts on financial stability, ensures the continuity of critical functions, and avoids exposing taxpayers to loss.

The document proposes a set of principles covering:

  • disclosures on the instruments and liabilities within the scope of bail-in;

  • valuations to inform and support the application of bail-in;

  • 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;

  • securities law and securities exchange requirements during the bail-in;

  • processes for transferring governance and control rights and establishing a new board for the firm in resolution; and

  • market and creditor communications.

Second, the Consultation on Funding Strategy Elements of an Implementable Resolution Plan proposing guidance on the development of a plan for funding in resolution that builds on the FSB’s August 2016 Guiding Principles on the temporary funding needed to support the orderly resolution of a global systemically important bank (G-SIB) and existing supervisory and resolution guidance on liquidity risk management and resolution planning.

It identifies a set of key funding strategy elements covering:  1.  funding strategy capability; 2. a resolution funding plan by the authorities; 3. the use of firm assets and private sources of funding; 4. access to temporary public sector backstop funding mechanisms; and 5. information sharing and coordination between authorities. 

Comments are due to the FSB by February 2, 2018.

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Financial Stability Board

FSB Issues Report on Financial Sector Cybersecurity Regulations

The Financial Stability Board (FSB) issued its conclusions from a stocktake on cybersecurity regulations, guidance and supervisory practices which was delivered to the October 2017 Finance Minsters and Central Bank Governors in Washington, DC.

Notable findings of the FSB stocktake include the following:

  • All FSB member jurisdictions report drawing upon a small body of previously developed national or international guidance or standards when developing their own regulatory or supervisory schemes for the financial sector;

  • Some elements commonly covered by regulatory schemes targeted to cybersecurity include risk assessment, regulatory reporting, role of the board, third-party interconnections, system access controls, incident recovery, testing and training.

  • Jurisdictions remain active in further developing their regulation and guidance. Seventy-two per cent of jurisdictions report plans to issue new regulations, guidance or supervisory practices that address cybersecurity for the financial sector within the next year.

  • International bodies also have been active in addressing cybersecurity for the financial sector.

Private sector participants in the stocktake expressed support for principles-based, risk-based and proportional regulation, and also stressed the importance of a globally consistent approach that avoids multiple, potentially conflicting regulatory schemes.


The  summary report together with the detailed analysis can be viewed here.

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Financial Stability Board