Resolution Funding: Who Pays When Financial Institutions Fail?
Technical Notes and Manuals, August 16, 2018
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- Resolution Funding: Who Pays When Financial Institutions Fail?
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Bibliographic details
- Authors: Oana M Croitoru, Marc C Dobler, Johan Molin
- Published: August 16, 2018
- Series: Technical Notes and Manuals
- DOI: https://doi.org/10.5089/9781484371022.005
Summary
- A key element of the international reform agenda since the Global Financial Crisis has been to strengthen resolution regimes and make government bailouts the last, not first, resort.
- A new international standard prescribes a range of tools, powers, and funding arrangements needed to resolve “any financial institution that could be systemically significant or critical if it fails.”
- The standard recommends having resolution funding arrangements set up in advance, “so that authorities are not constrained to rely on public ownership or bail-out funds as a means of resolving firms.”
- The standard leaves open significant flexibility with respect to the arrangements that would provide the resources authorities will need to carry out effective resolution.
- This paper offers a framework for weighing the relative advantages of different resolution funding options that could meet the standard.
- The paper presents the main developments to date and discusses the advantages and disadvantages of different options.
Framework for Comparing Resolution Funding Options
- The paper provides a framework to weigh the relative advantages of different resolution funding options that could satisfy the international standard.
- Emphasis on pre-positioned funding arrangements to avoid reliance on public ownership or bail-out funds during resolution.
Main Developments to Date
- The document presents the main developments to date concerning resolution funding arrangements and international standards since the Global Financial Crisis.
Advantages and Disadvantages of Different Options
- The paper discusses the advantages and disadvantages of different resolution funding options, consistent with the standard’s allowance for significant flexibility in funding arrangements.
Publication and Metadata
- Authors: Oana M Croitoru, Marc C Dobler, Johan Molin
- Date: August 16, 2018
- Series: Technical Notes and Manuals No. 2018/001
- Issue: 001
- Volume: 2018
- Pages: 28
- DOI: https://doi.org/10.5089/9781484371022.005
- Stock No: TNMEA2018001
- ISBN: 9781484371022
- ISSN: 2075-8669
- Subject: Expenditure, Revenue administration
Technical Guidance Note; views expressed are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Content in this bundle
- IMF Technical Notes and Manuals | Resolution Funding: Who Pays When Financial Institutions Fail?