The Global Risks Alliance (GRA)
When a financial institution fails, authorities must protect depositors and critical functions, keep markets working and avoid using public money. Crisis management includes the lender of last resort, deposit insurance and, since the global financial crisis, resolution regimes with powers such as bail-in. This page sets out how crisis management and resolution work and where they are tested, the records that show readiness, and who decides.
Crisis management and resolution · Financial system · Committee meeting 2
percentile vs history, 0 to 100
red: most connected node
Fig.Systemic risk dashboard. Design wireframe with placeholder names and illustrative values, not a record or a live system.
Bank resolution is the process by which an authority restructures a failing financial institution to protect depositors and critical functions while shareholders and creditors bear losses. It works alongside the lender of last resort and deposit insurance. Resolution authorities, central banks, deposit insurers and boards hold the decisions.
How a failure at one financial centre can spread through settlement links. Design links, not real dependencies.
Recovery, resolution and public authority boundaries. The dossier below sets out how the risk develops, what is measured, where the data come from, how it is modelled and who decides.
Resolution regimes let authorities write down and convert creditors' claims, transfer business and keep critical functions running, so that shareholders and creditors bear losses before taxpayers.
A recapitalised firm still needs cash. Without access to central bank facilities and resolution funding, a resolution can fail even when the capital plan works.
Global firms operate through many legal entities in many countries. Resolution needs home and host authorities to cooperate, which crisis management groups and agreements prepare.
If creditors believe a firm will be rescued, they lend cheaply and monitor less. A credible resolution regime reduces that implicit subsidy.
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 creditors' claims into equity to absorb losses and recapitalise a failing firm. |
| Total loss-absorbing capacity | Capital and debt that can absorb losses in resolution, required for global systemically important banks. |
| No creditor worse off | The safeguard that creditors should not lose more in resolution than in normal insolvency. |
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 |
|---|---|---|---|---|
| Total loss-absorbing capacity | percent of risk-weighted assets | quarterly | Bank disclosures | OFFICIAL |
| Resolution plans assessed as credible | count by authority | annual | Resolution authority reports | OFFICIAL |
| Deposit insurance coverage limit | currency per depositor | on change | International Association of Deposit Insurers data | OFFICIAL |
| Implementation of the Key Attributes | status by jurisdiction and sector | annual | FSB resolution report | OFFICIAL |
| Crisis management groups established | count | annual | FSB records | OFFICIAL |
| Bank failures and resolution actions | count by tool used | annual | Resolution authority records | OFFICIAL |
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 annual resolution report | Implementation of resolution reforms across jurisdictions | Free, FSB terms |
| Single Resolution Board decisions and reports | Euro area resolution planning and cases | Public, EU reuse terms |
| FDIC resolution and failed bank lists | United States bank failures and resolutions | Public domain |
| International Association of Deposit Insurers survey data | Deposit insurance design across countries | Free to read, terms to check |
| Bank of England resolvability assessment framework disclosures | Resolvability self-assessments and supervisory findings | Free, Bank of England terms |
Financial Stability 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 firm is failing or likely to fail and which tool to use | Resolution plans and legal criteria |
| Central banks | What liquidity support to provide in resolution | Collateral and funding needs evidence |
| Deposit insurers and legislators | How coverage and funding are set | Comparative deposit insurance design |
| Bank boards | How to make the group resolvable | Resolvability requirements and supervisory findings |
What recovery options institutions plan for and whether they would work in a system-wide crisis.
Whether resolution tools can keep critical functions running while losses fall on shareholders and creditors.
How powers are divided between resolution authorities, supervisors, central banks and finance ministries.
How authorities in different countries cooperate when a group spans jurisdictions.
Recovery planning asks institutions to identify actions they could take under severe stress, such as raising capital, selling businesses or reducing risk. In a system-wide crisis, many firms may try the same actions at once.
Resolution frameworks give authorities powers to restructure failing institutions, for example by writing down or converting creditors' claims, transferring businesses or creating bridge institutions, while continuing critical functions.
The aim is to end the expectation that some firms are too big to fail, which distorts incentives and funding costs. Credibility depends on the authorities' readiness and on firms holding enough loss-absorbing resources.
Liquidity in resolution is a persistent challenge. A firm in resolution may need large temporary funding, raising questions about the role of central banks and public backstops.
Cross-border groups complicate resolution. National authorities may protect local creditors and assets, so cooperation agreements and planning matter.
| Method or data | What it shows | Its limit |
|---|---|---|
| Resolution planning analysis | Feasibility of strategies | Plans are confidential |
| Case studies | Past failures and resolutions | Each case differs |
| Legal comparison | Powers across jurisdictions | Law and practice differ |
| Simulation exercises | Coordination under stress | Exercises simplify reality |
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.