Financial Systems

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

CIGI Paper No. 51

Steven L. Schwarcz Mark Jewett E. Bruce Leonard Catherine Walsh David Kempthorne

December 3, 2014

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.

About the Authors

Steven L. Schwarcz

Steven L. Schwarcz is a CIGI senior fellow and the Stanley A. Star Distinguished Professor of Law and Business at Duke University. Steven is an expert on systemic risk and financial regulation, corporate governance of systemically important firms, cross-border resolution measures and sovereign debt restructuring.

Mark Jewett

Mark Jewett is a CIGI senior fellow and counsel to Bennett Jones LLP. He was previously senior assistant deputy minister at the Departments of Justice and Finance, and general counsel and corporate secretary at the Bank of Canada.

E. Bruce Leonard

E. Bruce Leonard is a veteran in the field of international insolvency and is founding member, chair and director of the International Insolvency Institute.

Catherine Walsh

Catherine Walsh teaches and writes principally in the areas of secured transactions and private international law. She has been actively involved in a number of national and international reform initiatives, including two multilateral legal instruments developed by the United Nations Commission on International Trade Law.

David Kempthorne