IRSG response to Swinburne report on non-bank resolution

Published 7 Oct 2013

The IRSG Post Trade workstream has commented on Kay Swinburne MEP's draft own-initiative report on a recovery and resolution framework for non-bank financial institutions.

The group is supportive of many of the recommendations in the report including:

  • The prioritisation of a recovery and resolution framework for CCPs  and for those CSDs which are exposed to credit risk;
  • The need to distinguish between CCPs and CSDs to take account of the fundamentally different role that each plays in the financial markets  and their different risk profiles;
  • The importance of aligning EU legislation on recovery and resolution with the relevant international standards set out by the FSB and CPSS-IOSCO.

However it also identified a number of additional points, including:

  • Recovery and resolution plans should address all the products cleared by a CCP rather than simply those that are mandated by legislation;
  • The prioritisation of CSDs with a banking licence should not result in the adoption of two separate regimes;
  • To be effective in times of crisis, resolution authorities should be national and not centralised at European level, although some cross-authority information sharing would be necessary.

You may also be interested in the following related papers:

IRSG response to European Commission consultation on a possible recovery and resolution framework for financial institutions other than banks

IRSG response to HMT consultation “Financial sector resolution: broadening the regime”