The success of the resolution process depends, to some extent, on the information quality provided by the resolution entity. Aiming to improve the efficiency and the information quality, more visibility on the resolution plan would be useful.
Information is crucial to achieve the resolution objectives. However, we think that information requirements should be governed by two principles:
Stability: Information requirements should remain stable during the resolution planning stage.
Materiality: Entities are involved in thousands of operations every day. For that reason, proportionality should apply (in particular only information that is necessary for the preferred resolution strategy should be required).
Different criteria applied by different resolution authorities when implementing the discretionary power to exclude liabilities from bail-in could create a problem of level playing field. A set of common enforceable principles to be used by all resolution authority is recommended.
The “no creditor worse off” principle is a key element in the resolution framework. For that reason, authorities should make efforts to align the rankings in the resolution framework and the insolvency framework.
“Modern Governance in Banking” is a new modular programme of three three-day modules at the INSEAD business school in Fontainebleau, France. The content is driven by the needs for bank directors and senior executives working in banks to review and update their corporate governance practices due to the many pressures they face, and will focus on the effectiveness of directors and boards. Successful completion by participants offers certification by INSEAD. Read more
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