GRA · Financial Regulation Nexus
Spatial financeWhere capital meets hazard, exposure and transition
Financial crisis management
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.
Financial crisis management on the record.
Financial crisis management: how the risk develops.
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.
Implicit guarantees distort incentives
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.
Runs move faster than procedure
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.
Loss allocation is contested
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.
Liquidity decides the outcome
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.
Supervisory review console.
The screen a team would use to follow this subject: its measures, states and decisions. Names are examples and values are illustrative.
Supervisory review console
Financial crisis management · Bank supervision · Cycle 1
Firms by risk rating
| Bank B | High | 3 | 4 | Enhanced |
| Bank D | Medium | 2 | 2 | Standard |
| Insurer Alpha | High | 3 | 4 | Enhanced |
| Fintech F1 | Low | 2 | 3 | Light |
Findings
Climate expectations met
share of firms, thematic review
What is measured, and how well.
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 | Published statistics |
| Loss-absorbing capacity requirement | percent of risk-weighted assets and of leverage exposure | annual | Resolution authority decisions and Pillar 3 | Published statistics |
| Deposit insurance coverage level | currency amount per depositor per institution | as amended | Deposit insurer records | Published statistics |
| Deposit insurance fund size | percent of covered deposits | annual | Deposit insurer annual reports | Published statistics |
| Bank failures and resolution actions | count by tool used | annual | Resolution authority and deposit insurer records | Published statistics |
| 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 |
What financial crisis management means for exposure, loss and capital.
The exposure, loss, scenario and capital views a risk officer, supervisor or ministry of finance would ask for, with the frameworks they report against. Structures follow supervisory and actuarial practice. Values are illustrative: never prices, ratings or advice.
Disclosure crosswalk
Where evidence on financial crisis management fits the disclosure and prudential frameworks institutions report against.
| Pillar | TCFD | ISSB IFRS S2 | Prudential (BCBS, IAIS) | Evidence this page can hold |
|---|---|---|---|---|
| Governance | Board oversight of climate-related risks | Governance requirements | Governance and risk appetite principles | Who owns the risk and how it is escalated |
| Strategy | Risks, opportunities and resilience | Scenario analysis and resilience | Strategy and business model principles | Scenario design and transmission paths |
| Risk management | Identify, assess, manage | Risk management processes | Internal control and ICAAP or ORSA | Exposure maps and loss views |
| Metrics and targets | Metrics used and targets set | Cross-industry and industry metrics | Data, metrics and reporting principles | Indicator definitions and units |
Where the evidence comes from.
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 |
Who decides, and what the evidence serves.
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 |
Outputs this topic produces
- Comparative maps of resolution powers, tools and authorities
- Case studies of resolutions, rescues and liquidations and the choices made
- Learning material on recovery planning, bail-in and resolution funding
- Briefs on deposit insurance design and its interaction with resolution
What experts ask.
Crisis management researchers ask how failure can be made orderly.
- How can large, complex institutions be resolved without taxpayer support or systemic disruption?
- How should losses be allocated between shareholders, creditors and others?
- How do recovery and resolution plans improve preparedness?
- When and how should central banks provide emergency liquidity?
- How effective is deposit insurance in preventing runs, especially with digital banking?
Making failure possible without disorder.
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.
How the evidence is built, and where it stops.
- 01
Case analysis
Studying past failures and resolutions with financial economics. Each case is distinct.
- 02
Legal and institutional comparison
Comparing resolution regimes using policy science. Untested regimes may not work as designed.
- 03
Game-theoretic analysis
Modelling creditor and depositor behaviour with game theory. Behaviour in panic is hard to model.
- 04
Scenario exercises
Testing crisis plans. See the planned supervisory scenario comparison.
How it is studied, and what the methods cannot say.
- 01Game theory and mechanism designHome-host cooperation in resolution · Regulatory competition between jurisdictionsApplied here
- 02Financial economics and macro-financeCosts and benefits of capital requirements · Tracing leakage of macroprudential measuresApplied here
- 03Policy, institutional and decision scienceRegulatory impact assessment · Comparing supervisory architecturesApplied here
- 04Data engineering, interoperability and stewardshipMapping templates to a common model · Entity resolution with identifiersApplied here
Questions and answers.
What is bail-in?
How does resolution differ from insolvency?
Does deposit insurance prevent runs?
Has resolution eliminated the need for public support?
Does the platform plan resolution for firms?
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