Working paper on Resolution Cross border resolution issues for systemic institutions: what are the main remaining challenges, what possible path to address them?
This paper(1) outlines the main conclusions of two conferences(2) given in 2019 related to cross border issues and resolution of GSIBs and reformulates those issues in two specific questions: From a resolution perspective, what are the key cross border challenges for GSIBs? How to address them and be well prepared?
Three types of frictions in a cross border context are identified: economic and prudential frictions, legal frictions and operational issues. Solutions are suggested to reduce each of them: credible and relevant resolution scenarios for operational resolution plans and credible guarantees to reduce economic and prudential frictions. Legal frictions could be reduced by implementing contractual or statutory recognition of rights of EU authorities in third countries and resolution actions of third country entities with subsidiaries or significant branches. Then, by deepening the cooperation and exchange information within fora such as Crisis Management Groups (CMG) and EU resolution colleges, operational issues such as execution risk can be further understood and reduced.
If this paper focuses on further EU resolution issues, its reasoning and conclusions should be considered in a broader way, and address cross border resolution issues for systemic institutions.
(1) Paper prepared by Marion Zosi, Resolution Expert at ACPR, with advice by Ben KONARÉ deputy head of Resolution Department at ACPR
(2) Panel interventions by Frédéric Visnovsky, Deputy Secretary General, Executive Director for Resolution, in Resolution Readiness Seminar set up by the Central Bank of Ireland (Monday 2 December 2019) and in the BPI-IIF Cross-Border Regulation & Resolution Colloquium New York (Monday 9 December 2019).
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- Publié le 01/09/2020
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