Clifford Chance
Asian bank resolution regimes
21 May 2013
Clifford Chance, in conjunction with the Asia Securities Industry & Financial Markets Association (ASIFMA), has conducted a survey of eight key Asian jurisdictions to obtain an overview of the insolvency regimes and resolution powers available in relation to banks in each jurisdiction, as well as other key features including depositor preference and treatment of local branches of foreign banks.
The global financial crisis and the failure of Lehman Brothers resulted in increased focus on the development of effective resolution mechanisms for global, systemically important banks and broker-dealers. The G20 called for effective resolution mechanisms for such institutions and in November 2011, the FSB published its "Key Attributes of Effective Resolution Regimes for Financial Institutions".
The Clifford Chance work demonstrates that much is under development in Asia but there is some way to go before the region will be compliant with the FSB attributes. ASIFMA commented that "As ASIFMA believes that effective resolution regimes for global, systemically important banks and broker-dealers are crucial to a safe and sound financial system, we will continue to work constructively with regulators to bring this about going forward. To that end, ASIFMA and experts from our GFMA partners AFME and SIFMA will be meeting policy makers in the region in the near future in order to provide our views on the current and proposed systems in Europe and the US as well as input into the development of these systems within Asia."
