The Global Risks Alliance (GRA)
When a bank, insurer or market infrastructure fails, authorities must choose between liquidation, resolution and public support, often over a weekend. Resolution regimes aim to let a failing firm be restructured or wound down without taxpayer support and without disrupting critical functions. This page explains how crises escalate, how recovery and resolution planning, bail-in, deposit insurance and emergency liquidity fit together, and the records that show how far regimes are ready.
GRA · Established · service level R0
Bank resolution is the process by which authorities restructure or wind down a failing bank while protecting critical functions, depositors and public funds, often over a weekend. Resolution regimes built on the FSB Key Attributes use tools such as bail-in, supported by loss-absorbing capacity and deposit insurance, and they depend on liquidity in resolution.
How a failure at one financial centre can spread through settlement links. Design links, not real dependencies.
The working screen behind this subject: its structure, terms and states. Names are placeholders and values illustrative.
Financial crisis management · Bank supervision · Cycle 1
| Bank B | High | 3 | 4 | Enhanced |
| Bank D | Medium | 2 | 2 | Standard |
| Insurer Alpha | High | 3 | 4 | Enhanced |
| Fintech F1 | Low | 2 | 3 | Light |
share of firms, thematic review
Resolution and contingency policy. The dossier below sets out how the risk develops, what is measured, where the data come from, how it is modelled and who decides.
If creditors expect a large firm to be rescued, they lend more cheaply and monitor less. The firm grows and takes more risk, making a rescue more likely when it fails. Resolution regimes exist to make failure credible.
Uninsured depositors and wholesale funders can withdraw in hours through digital channels. A resolution designed for a weekend can be overtaken by a run that starts on a weekday morning.
Bail-in writes down and converts creditor claims in the order of the creditor hierarchy, with the safeguard that no creditor is worse off than in insolvency. Legal challenge and political pressure test that order in every case.
A recapitalised firm still needs liquidity to keep paying. Without resolution funding and access to central bank facilities, resolution can fail even when the capital plan works.
Each term as this page uses it. Where a standard-setting body defines the term, the wording follows that body.
| Term | Definition |
|---|---|
| Bail-in | Writing down or converting a failing bank's liabilities into equity to absorb losses and recapitalise it. |
| MREL | The EU minimum requirement for own funds and eligible liabilities that can absorb losses in resolution. |
| Key Attributes | The FSB standard for effective resolution regimes for financial institutions. |
Each indicator carries its unit, its cadence, the kind of source behind it and the evidence label a value would carry. No values are shown: a programme supplies them under its own authority.
| Indicator | Unit | Cadence | Source type | Label |
|---|---|---|---|---|
| Key Attributes implementation by jurisdiction | implementation status per resolution power | periodic | FSB resolution reporting and peer reviews | OFFICIAL |
| Loss-absorbing capacity requirement | percent of risk-weighted assets and of leverage exposure | annual | Resolution authority decisions and Pillar 3 | OFFICIAL |
| Deposit insurance coverage level | currency amount per depositor per institution | as amended | Deposit insurer records | OFFICIAL |
| Deposit insurance fund size | percent of covered deposits | annual | Deposit insurer annual reports | OFFICIAL |
| Bank failures and resolution actions | count by tool used | annual | Resolution authority and deposit insurer records | OFFICIAL |
| Resolvability self-assessment disclosures | presence and scope of published assessments | biennial | Firm and authority publications | DECLARED |
| Crisis simulation exercises held | count by participating authorities | annual | Authority annual reports | REPORTED |
The topic as a computational graph: named sources feed the methods, an evidence review gates the outputs, and the decisions stay with the authorities that hold them.
Fig. 02Nodes carry their type, two metric rows and a state; connectors show what feeds what; dashed frames name the owners; the timeline is the cadence. Design of the pipeline, not a record of a run.
Named public datasets and institutional records, each with its licence class. Sources by agreement are used only under their terms and never republished.
| Source | What it gives | Licence class |
|---|---|---|
| FSB resolution reports and peer reviews of resolution regimes | Status of resolution reforms and of Key Attributes implementation | Public, terms per FSB |
| Single Resolution Board decisions and MREL dashboard | Resolution decisions and loss-absorbing capacity in the banking union | Public, EU reuse policy with attribution |
| FDIC failed bank list and resolution handbook | Failed US banks, resolution methods and procedures | Public domain, US government work |
| IADI annual survey of deposit insurers | Coverage, funding and powers of deposit insurers worldwide | Public summaries, terms per IADI |
| IMF systemic banking crises database | Dates, policy responses and fiscal costs of banking crises | Public, IMF terms |
| Bank of England resolvability assessment framework disclosures | Published resolvability assessments of major UK banks | Public, terms per authority |
Financial Regulation Nexus prepares evidence. The decisions below are taken by the authorities named, under their own rules, and never by the platform.
| Who decides | The question | Evidence this page serves |
|---|---|---|
| Resolution authorities | Whether a failing firm enters resolution and which tools apply | Comparative tools, case histories and the public interest tests applied in past cases |
| Central banks | Whether and on what terms to provide emergency liquidity | Lender of last resort frameworks and case histories |
| Finance ministries and legislatures | Whether public support is used, and how deposit insurance and resolution are designed | Comparative regimes and crisis cost records |
| Boards of systemic firms | Whether recovery options are credible and resolution obstacles removed | Supervisory expectations and published resolvability assessments |
Crisis management researchers ask how failure can be made orderly.
Before reforms that followed the global financial crisis, authorities often faced a choice between disorderly failure and public rescue for large institutions, creating expectations of support. Resolution regimes aim to allow failing institutions to be restructured or wound down while preserving critical functions, with losses borne by shareholders and creditors through tools such as bail-in.
Effective resolution requires planning, loss-absorbing capacity, legal powers and cross-border cooperation. Recent bank failures have shown that runs can be faster in a digital age, testing assumptions about the time available. Deposit insurance and central bank liquidity remain central to stopping panics.
Studying past failures and resolutions with financial economics. Each case is distinct.
Comparing resolution regimes using policy science. Untested regimes may not work as designed.
Modelling creditor and depositor behaviour with game theory. Behaviour in panic is hard to model.
Testing crisis plans. See the planned supervisory scenario comparison.
The current service level is R0: information and enquiries. An enquiry receives a reference and names the next step; applications, payments, compute allocations and registrations open only when their team, terms and review capacity exist.