Basic Characteristics of Effective Resolution Regime for FSB Financial Institutions

Most of the regulative and structuring studies conducted as a result of the global crisis with the participation of several international organizations and institutions, under the leadership of  G20, particularly the FSB, for the purpose of establishing globally a new financial structure in accordance with the resolutions taken in the G20 Leaders Summit, finalized. In this context, comprehensive regulations were introduced in issues of bank resolution and deposit insurance for the purpose of establishing a stronger and safer financial sector in the period following the global crisis.  “The Key Attributes of Effective Resolution Regimes for Financial Institutions (FSB Key Attributes)”, introduced by the FSB in October, 2011, is one of the fundamental regulations in the bank resolution area.

 Insurance companies, intermediary institutions, investment funds, financial infrastructure institutions, financial holding companies etc. and other financial institutions as well as banks take part within the scope of this regulation shortly called FSB’s Key Attributes.  It is aimed to resolve the financial institutions (SIFI) , which have difficulty with the FSB’s Key Attributes and have systemic importance, without imposing additional cost to taxpayers. 

Within the frame of the new resolution regime introduced by the FSB, it is seen that 4 key elements have gained importance:

  • Strengthening the national resolution regime,
  • Strengthening the cross-border cooperation,
  • Ensuring that the financial institutions and resolution authorities are getting ready for the possible problems/crises by preparing recovery and resolution plans,
  • Eliminating obstacles in front of the effective resolution process.

Since our country is both a member of the G20 and a member of the FSB, there is a need to make radical and important changes in our legislation in terms of regulations which Turkey is obligated to comply with. There is an ongoing legislation improvement study carried out jointly by the SDIF and BRSA regarding this matter.

You can have access to the document “the Key Attributes of Effective Resolution Regimes for Financial Institutions (FSB Key Attributes)” via the following link.