Only four jurisdictions meet bank resolution backstop standards
Only four of 19 member jurisdictions fully comply with standards for public backstop funding in bank resolutions, according to a Financial Stability Board review released on October 9, 2026. Ten jurisdictions face material or severe gaps in liquidity scale, operational speed, or loss recovery.
Four compliant, ten deficient
Hong Kong, Japan, the United Kingdom, and the United States are the only four jurisdictions fully compliant with Key Attribute 6. In contrast, eight members—including Australia, Brazil, China, Switzerland, and the European Banking Union—were assessed as materially non-compliant, while Argentina and India were rated non-compliant.
The review noted that “progress is uneven and incomplete,” with fewer than half of members operating mechanisms capable of delivering liquidity at the required scale and speed.
Many frameworks rely on capped deposit funds or collateralised lending that cannot meet systemic cash outflows.
Even in the European Banking Union, low funding flexibility constrained the overall score.
The trillion-dollar liquidity gap
The review follows the 2023 bank runs, where deposit outflows reached 20 to 30 percent in a single day, exposing the limits of uncoordinated safety nets.
Sizing requirements have expanded as global systemically important banks hold assets reaching multiple times domestic output.
The four top-performing jurisdictions solved the scale challenge by establishing pre-arranged routes to flexible public resources, such as HM Treasury indemnities or United States Treasury borrowing for resolution funds.
A decade of half-built backstops
Fifteen years of post-crisis diplomacy have failed to eliminate the risk of ad-hoc bailouts.
Major financial hubs that leave backstops legally capped or untested preserve dangerous ambiguity.
Without pre-arranged fiscal mechanisms to absorb tail risks, orderly resolution remains an illusion.