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.

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The views expressed do not necessarily reflect those of the Bank Policy Institute’s member banks, and are not intended to be, and should not be construed as, legal advice of any kind.