GRA · Financial Stability
Spatial financeWhere capital meets hazard, exposure and transition
Crisis management and resolution
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.
How the work runs.
Systemic risk dashboard
Crisis management and resolution · Financial system · Committee meeting 2
Vulnerabilities heat map
percentile vs history, 0 to 100
Exposure network
red: most connected node
Credit-to-GDP gap
Fig.Systemic risk dashboard: example names and illustrative values, not a record or a live system.
Crisis management and resolution: how the risk develops.
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 replaces bailout
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.
Liquidity in resolution
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.
Cross-border coordination
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.
Credibility shapes behaviour
If creditors believe a firm will be rescued, they lend cheaply and monitor less. A credible resolution regime reduces that implicit subsidy.
Settlement dependencies, and what fails with a node.
How a failure at one financial centre can spread through settlement links. Design links, not real dependencies.
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 |
|---|---|---|---|---|
| Total loss-absorbing capacity | percent of risk-weighted assets | quarterly | Bank disclosures | Published statistics |
| Resolution plans assessed as credible | count by authority | annual | Resolution authority reports | Published statistics |
| Deposit insurance coverage limit | currency per depositor | on change | International Association of Deposit Insurers data | Published statistics |
| Implementation of the Key Attributes | status by jurisdiction and sector | annual | FSB resolution report | Published statistics |
| Crisis management groups established | count | annual | FSB records | Published statistics |
| Bank failures and resolution actions | count by tool used | annual | Resolution authority records | Published statistics |
Trace a shock in crisis management and resolution to the balance sheet.
Assembled from the Nexus Standards area profile Financial stability and prudential risk: the shocks it names, the systems and sectors that carry the loss, the controls that dampen it and the data that observe it. Pick an initiating shock and step through the cascade to see which exposures it reaches and where losses could concentrate. The Map view places the run on an example geography with open data. Every weight is a stated assumption. An exercise, not a forecast, a valuation, a rating or investment advice. To model a place of your own choosing, open the full System Builder.
Hazards
- Dam failure
- River flood (set off downstream)
- Flash flood (set off downstream)
- Mass displacement (set off downstream)
- Widespread power outage (set off downstream)
- Water supply shortfall (set off downstream)
Systems and couplings
Controls
NS-0Constitution and principlesNS-3Risk record UNIs (grammar, legacy crosswalk, allocation authority)NS-9Contextual UNIs (deployments, instances, programme instances)NS-10Policies and clauses (machine-readable obligations: definition, binding, evaluation and enforcement)NS-11Verification and monitoring (evidence, attestations, zero-trust conformance observation)NS-14Conformance and crosswalk to external standardsNRS-H62Hazard family: Compound and multi-hazard events (NHS-1 sys.compound)NRS-H113Hazard family: Financial-system fragility (NHS-1 soc.financial-system)NRS-H118Hazard family: Organised crime and illicit economies (NHS-1 soc.crime)NRS-H79Hazard family: Mental health crises (NHS-1 health.mental)NRS-U9Universe platform profile: Financial Regulation NexusNRS-C5Scenarios and stress testing
Observation
- BIS Data Portal (credit, debt service, property prices, banking statistics) (listed for reference)
- IMF data services (WEO, IFS, FSI via SDMX) (listed for reference)
- OECD Data Explorer (SDMX API) (listed for reference)
- Financial Soundness Indicators
- Macroeconomic Dashboard
Example geography
- Western Europe: 152 hexagonal cells
- Night lights tonight, outages (VIIRS Day/Night Band), NASA GIBS
- Surface water through cloud, 30 m (OPERA DSWx-S1 radar), NASA GIBS
- Rain rate, last half hour (IMERG), NASA GIBS
- Surface soil moisture (SMAP), NASA GIBS
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 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 |
What crisis management and resolution 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.
Transmission channels
How a shock in crisis management and resolution reaches credit, market, underwriting, liquidity and operational risk, and feeds back.
Who decides, and what the evidence serves.
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 |
Outputs this topic produces
- Guide to resolution tools and the creditor hierarchy
- Brief on liquidity in resolution
- Comparative notes on deposit insurance design
- Questions for boards on resolvability
Shared questions the industry asks.
- 01
Can a firm recover on its own?
What recovery options institutions plan for and whether they would work in a system-wide crisis.
- 02
Can a firm fail safely?
Whether resolution tools can keep critical functions running while losses fall on shareholders and creditors.
- 03
Who decides?
How powers are divided between resolution authorities, supervisors, central banks and finance ministries.
- 04
What about cross-border groups?
How authorities in different countries cooperate when a group spans jurisdictions.
How the risk arises and transmits.
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.
How evidence is gathered, and where it stops.
| 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 |
How it is studied, and what the methods cannot say.
- 01Financial economics and macro-financeRun incentives in funds and banks · Leverage cycles · Implicit guaranteesApplied here
- 02Scenario design and stress testingMacro-financial scenario design · System-wide exercises · Reverse stress testsApplied here
- 03Complex systems and agent-based modellingAgent-based market models · Early warning of regime shifts · Feedback loop mappingApplied here
Questions and answers.
What is bail-in?
What does no creditor worse off mean?
What is the lender of last resort?
Does GRA advise authorities or firms on resolution?
What does too big to fail mean?
Why are public authority boundaries important?
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