Resolution of Cross-Border Banks - A Proposed Framework for Enhanced Coordination

June 11, 2010

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Resolution of Cross-Border Banks - A Proposed Framework for Enhanced Coordination, (USA: International Monetary Fund, 0) accessed November 21, 2024

Summary

The recent financial crisis has given renewed urgency to the need for resolution systems for financial institutions, which both safeguard financial stability and limit moral hazard. However, experience demonstrates that these systems will not be effective unless progress is also made in developing a framework that applies on a cross-border basis. Since many systemically important financial groups operate globally, an uncoordinated application of resolution systems by national authorities will make it much more difficult to both secure the continuity of essential functions (thereby limiting contagion), and ensure that shareholders and creditors bear the financial burden of the resolution process.

Subject: Bank resolution, Bank supervision, Banks, Financial institutions, Globalization, International banking, International cooperation, Nonbank financial sector

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