United States: Financial Sector Assessment Program-Technical Note-Financial Crisis Preparedness and Deposit Insurance
IMF Staff Country Reports, August 10, 2020
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Bibliographic details
- Published: August 10, 2020
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513552903.002
Key findings and assessment
- The U.S. authorities should preserve the considerable progress in the resiliency, recoverability, and resolvability of financial companies and insured depository institutions (IDIs), and intensify financial crisis preparedness efforts.
- After a decade of resolution planning, the development of the U.S. resolution regime is more advanced than in other major economies.
- The resolution regime, together with the strong track record of the deposit insurance system (DIS) for banks and the federal banking agencies’ (FBAs) preparation for resolution, provide a strong foundation for crisis preparedness.
- Bank holding companies (BHCs) have integrated recovery and resolution planning (RRP) into business-as-usual (BAU) activities, increasing their resiliency; this process has deepened the FBAs’ understanding of the BHCs’ business models and RRP capabilities.
- Recent changes reduced the BHCs’ RRP; the FBAs should mitigate those changes and continue their own annual resolution planning.
Policy recommendations and actions
- Preserve the progress made on resiliency, recoverability, and resolvability of financial companies and IDIs.
- Intensify financial crisis preparedness efforts across agencies.
- FBAs should:
- Continue annual resolution planning.
- Mitigate recent changes that reduced BHCs’ RRP.
- Strengthen interagency crisis preparedness, particularly collaboration with the U.S. Department of the Treasury (UST), given the UST’s essential role in critical aspects of crisis responses.
- Further refinements relating to cross-border resolution should be pursued.
Institutional strengths and operational notes
- The U.S. resolution regime is more advanced than in other major economies after a decade of resolution planning.
- The DIS for banks has a strong track record.
- FBAs’ preparation for resolution complements the DIS and strengthens overall crisis readiness.
- Integration of RRP into BAU at BHCs has increased resiliency and improved FBAs’ understanding of business models and RRP capabilities.
Cross-border resolution
- Further refinements relating to cross-border resolution deserve attention (no additional specifics provided in the source content).
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- UNITED STATES: Financial Crisis Preparedness and Deposit Insurance