27 January 2020

BIS: Cross-border resolution cooperation and information-sharing: an overview of home and host authority experience

This paper examines cross-border cooperation and information-sharing arrangements for G-SIBs and other foreign-owned locally systemic banks, with a particular focus on arrangements other than CMGs. The paper is based on a survey of authorities from 16 jurisdictions that are home or host to G-SIBs and/or domestic systemically important banks (D-SIBs), including non-CMG host jurisdictions.

It presents their experiences as they relate to both firm-specific and non-firm-specific cooperation arrangements. Firm-specific arrangements include those maintained by some G-SIB home authorities with non-CMG hosts for resolution-focused purposes, extended resolution colleges and supervisory colleges with an extended mandate to cover resolution issues.

Cooperation and information-sharing between home and host authorities are critical in supporting effective cross-border resolution planning and execution. Cross-border cooperative arrangements provide a means for discussing and agreeing resolution strategies and the planning and coordination of resolvability assessments.

While crisis management groups (CMGs) are a core forum for cooperation between home and key host authorities for global systemically important banks (G-SIBs), additional arrangements may also be required, especially for host authorities that do not participate in CMGs.

Most of the progress on cooperation and information-sharing arrangements is evident where a bank’s operations are material for both home and host authorities, while less progress is evident where bank is locally systemic only for the host jurisdiction.

Across the survey sample, host authorities that do not participate in such regional or extended multilateral arrangements have access to limited firm-specific information.

Both home and host authorities use multilateral non-firm-specific arrangements for a range of activities to support or supplement cross-border cooperation and information-sharing.

Host authorities that do not participate in cooperation arrangements, or have no access to group resolution information, reported that they would be less likely to support a group resolution strategy and more likely to take unilateral measures in relation to the local operations of a crossborder group.

The findings of this study therefore show progress, but there are also instances where the information needs of host authorities on resolution planning continue to be unmet. Authorities generally recognise that cooperation and information-sharing are necessary for cross-border resolution, and this is driving the establishment of varying types of arrangement, with their differences in part reflecting the structure and resolution strategy of individual banks. The dissemination of effective practices may help to refine existing arrangements and develop new ones to address remaining gaps. That is the motivation of this paper.  

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