FSB Enhances Global Crisis Preparedness Framework

Supporting member authorities in strengthening their crisis preparedness remains a central pillar of the Financial Stability Board’s (FSB) mandate to promote global financial stability. A strategic review, led by Andrea Enria, former Chair of the Supervisory Board of the European Central Bank, is underway to bolster the FSB’s crisis preparedness activities and adapt to evolving vulnerabilities in the global financial system.

A Decade of Standard-Setting and Lessons Learned

Over 15 years of standard-setting by the FSB, anchored in the Key Attributes of Effective Resolution Regimes for Financial Institutions and related sectoral guidance, has established a solid foundation for addressing financial crises. The framework, initially adopted in 2011, has been tested by several periods of financial turmoil. These events demonstrated the framework’s benefits but similarly revealed gaps in both the framework itself and its implementation, highlighting the need for better integration with broader crisis preparedness activities.

Strategic Review: Three Key Aims

The FSB’s strategic review is focused on three core objectives:

• Strengthening and Adapting Activities: Enhance and, where necessary, adapt the FSB’s crisis preparedness activities to respond to changes and emerging vulnerabilities in the global financial system, drawing on lessons learned from crises since the FSB’s formation in 2009.
• Comprehensive Crisis Lifecycle Coverage: Expand the scope of crisis preparedness activities to encompass all stages of a crisis – from early intervention measures, through recovery and resolution, to post-stabilization restructuring.
• Internal Refinement: Refine internal processes and organizational structure to effectively achieve the FSB’s strategic objectives for crisis preparedness.

Reinforcing the Key Attributes

A key component of the review is to strengthen the central role of the Key Attributes of Effective Resolution Regimes for Financial Institutions as the international standard for resolution regimes for financial institutions. The Key Attributes, originally published in October 2011 and revised in 2014 and 2024, outline twelve essential features for effective resolution regimes, aiming to resolve failing financial institutions in an orderly manner without taxpayer exposure and whereas maintaining vital economic functions.

Andrea Enria to Lead the Review

The FSB has appointed Andrea Enria, former Chair of the Supervisory Board of the European Central Bank and the first Chair of the European Banking Authority, to lead the high-level group conducting the strategic review. Upon his appointment, Mr. Enria stated, “The ability to manage crises effectively is not just a technical requirement but a cornerstone of global financial stability. I am honoured to chair this strategic review of the FSB’s crisis preparedness activities, which aims to ensure that the crisis management framework remains credible and fit for purpose.”

The review builds upon the foundation laid by the FSB’s work since the 2008 financial crisis, recognizing the need for continuous adaptation and improvement in the face of an evolving global financial landscape. The Key Attributes are designed to address the “too big to fail” problem by reducing the probability and impact of failures of systemically important financial institutions.