TCH Responds to Two FSB Resolution Related Consultations: Internal TLAC and FMI Continuity Access

TCH filed comment letters responding to two recent consultations issued by the Financial Stability Board (FSB) on resolution-related topics: (i) guidance on continuity of access to financial market infrastructures (FMIs) for a firm in resolution; and (ii) guiding principles on internal TLAC. The FMI related consultation seeks to address the risk that a bank in resolution might be unable to maintain access to the clearing, payment, settlement and custody services provided by FMIs that are necessary to continue the provision of a bank’s critical functions in resolution, and the TCH comment letter was generally supportive of the FSB’s efforts with recommendations for minor adjustments. The internal TLAC consultation proposes a set of guiding principles to support the implementation of the internal TLAC requirement, and the TCH comment letter offered a set of constructive suggestions for how the guidance could be amended to support and facilitate, and not undermine, a ‘single point of entry’ resolution strategy.