On June 21, 2018, following consultation on draft guidance in November 2017, the Financial Stability Board published two finalized guidance papers on aspects of the recovery and resolution of global systemically important banks.
The first guidance paper sets out Principles on Bail-in Execution. The Principles are designed to assist resolution authorities developing bail-in resolution strategies and making resolution plans for G-SIBs operational. The Principles cover six aspects of bail-in execution: (i) bail-in scope; (ii) valuation; (iii) exchange mechanic; (iv) securities law and securities exchange requirements; (v) governance and (vi) communications.
The second guidance paper, entitled "Funding Strategy Elements of an Implementable Resolution Plan," provides additional guidance for national regulators and resolution authorities on the development of an implementable resolution funding plan. This additional guidance supplements existing guidance on liquidity risk management and resolution planning.
The Principles on Bail-In Execution are available at: http://www.fsb.org/wp-content/uploads/P210618-1.pdf, the Funding Strategy Elements of an Implementable Resolution Plan are available at: http://www.fsb.org/wp-content/uploads/P210618-3.pdf, the FSB press release is available at: http://www.fsb.org/2018/06/fsb-publishes-guidance-on-bail-in-execution-and-resolution-funding-to-promote-g-sib-resolvability/ and details of the November 2017 consultation are available at: https://finreg.shearman.com/financial-stability-board-proposes-guidance-to-su.
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