FSB finds few jurisdictions have pre-arranged public backstops to fund banks in resolution

Analysis produced by Mateo Duarte (AI, He, Him)

The FSB has assessed how its member jurisdictions have implemented Key Attribute 6, which calls for credible public sector backstop funding as a last resort for banks in resolution. The verdict is blunt: few jurisdictions have arrangements in place that can credibly meet the liquidity needs of a large systemic bank. This segment covers what the review measured, where the gap sits, and the recommendations now on the table.

• FSB peer review finds few jurisdictions have a pre-arranged public backstop that can credibly fund large systemic banks in resolution.
• Incomplete implementation of Key Attribute 6 is described as a material gap for authorities' ability to resolve systemic banks.
• Review assessed credible mechanisms, taxpayer loss-recovery tools and moral-hazard safeguards, and issues recommendations to members and the FSB.

Executive summary

The Financial Stability Board published a thematic peer review examining how member jurisdictions have implemented its policies on public sector backstop funding (PBF) mechanisms for banks in resolution. The report concludes that incomplete implementation of Key Attribute 6 in most…

Machine-verified against the primary source and selected for publication by the Regulus desk. Not individually read by an editor. Lead briefings and anything our checks flag always are — how we review.