United States: Financial Sector Assessment Program-Review of the Key Attributes of Effective Resolution Regimes for the Banking and Insurance Sectors-Technical Note
IMF Staff Country Reports, July 7, 2015
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- United States: Financial Sector Assessment Program-Review of the Key Attributes of Effective Resolution Regimes for the Banking and Insurance Sectors-Technical Note
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Bibliographic details
- Published: July 7, 2015
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513544045.002
Executive summary
- Publication date: July 7, 2015.
- This Technical Note reviews the key attributes of effective resolution regimes for the banking and insurance sectors in the United States.
- The United States’ resolution regime for financial institutions has been significantly enhanced since the financial crisis.
- U.S. authorities have undertaken significant efforts to develop the capability to deploy the Orderly Liquidation Authority, if and when needed, to safeguard financial stability.
- Of particular importance is the development of the so-called single point of entry strategy, designed to take advantage of most systemically important financial institutions in the United States being organized under a holding company structure.
Key findings
- The United States has strengthened its resolution regime for financial institutions since the financial crisis.
- Significant effort has been made to develop capability to deploy the Orderly Liquidation Authority to safeguard financial stability.
- The single point of entry strategy is central to the U.S. approach, leveraging holding company organizational structures of systemically important financial institutions.
Resolution capabilities and strategies
- Orderly Liquidation Authority:
- Developed as a mechanism to safeguard financial stability by providing an alternative to disorderly failure.
- Authorities have focused on operational preparedness to deploy this authority when needed.
- Single point of entry strategy:
- Designed to use the holding company as the resolution entry point for most systemically important financial institutions.
- Intended to preserve critical functions and limit contagion across the financial system.
Policy implications and recommendations (implicit in Technical Note focus)
- Continue to enhance operational readiness to implement the Orderly Liquidation Authority where necessary.
- Maintain and refine resolution planning that supports a single point of entry strategy for holding-company-organized systemically important financial institutions.
- Ensure cross-sector coverage that addresses both banking and insurance sectors’ resolution needs.
Subject areas and keywords covered
- Subject: Bank liquidation, Bank resolution framework, Bridge bank, Financial crises, Financial institutions, Insurance, Insurance companies
- Keywords: bank holding company, Bank liquidation, Bank resolution framework, Bridge bank, CR, financial company, Global, Insurance, Insurance companies, ISCR, resolution authority, resolution power, resolution regime, resolution strategy, State insurance
International Monetary Fund. United States: Financial Sector Assessment Program-Review of the Key Attributes of Effective Resolution Regimes for the Banking and Insurance Sectors-Technical Note.
Content in this bundle
- _cr15171 - Executive Summary and Key Findings