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Effective resolution regimes for systemically important central counterparties (CCPs) and the availability of adequate resources and tools for CCP resolution remain critical for financial stability and ensuring confidence in the financial system.
As part of the work on financial resources and tools for systemically important CCP resolution, the FSB conducted a qualitative analysis of a set of financial resources and tools for resolution: (i) bail-in bonds; (ii) resolution funds; (iii) resolution-specific insurance; (iv) resolution-specific third-party contractual support; (v) resolution cash calls; (vi) statutory or contractual variation margin gains haircutting (VMGH) for resolution; and (vii) equity in a first-loss position.
The resources and tools were assessed against the relevant considerations for financial resources set out in the FSB Key Attributes of Effective Resolution Regimes for Financial Institutions and accompanying guidance on CCP resolution.
The report proposes a "resolution toolbox" approach, which would involve making a set of resolution-specific resources and tools available to the resolution authority in a CCP resolution. The report outlines means for promoting implementation of the resolution-specific toolbox approach as a global standard.
The FSB invites comments on the report and accompanying questions. Written responses should be sent to fsb@fsb.org by 20 November 2023 with the title “CCP resolution resources and tools”.
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