Resolution funding gaps persist as digital risks widen
Only four of 19 jurisdictions fully meet the international standard on resolution funding, the Financial Stability Board’s Resolution Steering Group Chair said in Berlin. The Chair called for stronger liquidity backstops and joint crisis preparation.
Liquidity tests the resolution framework
The Financial Stability Board (FSB) review found only four of 19 jurisdictions fully compliant overall with Key Attribute 6 on resolution funding.
The European Union Banking Union was not among them.
The Chair stressed that recapitalisation alone cannot sustain a resolved bank: it also needs liquidity to meet payments while confidence returns.
The European Commission’s banking competitiveness report discusses stronger resolution liquidity and deposit protection.
It also raises a possible deposit insurance role for the Single Resolution Fund for the largest banks, alongside liquidity support for national guarantee schemes.
The Chair supported closer integration but stressed clear responsibilities, safeguards and relationships between funding arrangements.
Shared providers transmit disruption
The Chair urged authorities to track critical services beyond banks, including stablecoins, tokenised deposits, deposit-placement platforms and sweep arrangements.
Operational failures also demand preparation: CrowdStrike’s faulty update disrupted services in July 2024, while a Google Cloud failure in London affected Revolut and other institutions on October 20, 2026.
Financial vulnerabilities remain: March 2020 market stress, Archegos’s 2021 failure and September 2022 UK gilt disruption illustrated leverage and liquidity risks outside banking.
Readiness beyond prevention
The Chair’s priority is practical readiness when prevention fails, including decisions made with compromised bank data.
Cooperation must connect supervisors, resolution authorities, deposit insurers and central banks.
Revised IADI Principles 17 and 18 cover safety-net coordination and cross-border information sharing.