Comments on the September 29, 2014 FSB Consultative Document, “Cross-Border Recognition of Resolution Action”

On September 29, 2014, the Financial Stability Board’s (FSB’s) Consultative Document, “Cross-Border Recognition of Resolution Action” was released. This consultative document proposes a package of policy measures and guidance consisting of elements that jurisdictions should consider in order to prevent the costs and consequences of disorderly resolution procedures for large, complex and systemically important financial institutions and to promote effective cross-border resolution. As part of the consultative process the FSB called for comments on this document. This paper is a response to this call, and in particular focuses on question 3 and question 4 of the consultative document. The comments regarding question 3 examine the appropriate design and implementation of resolution procedures for global systemically important financial institutions, and question 4 examines resolution regimes based on contractual approaches.