FDIC Enhances Resolution Committee with Addition of 2 EU Regulators
The Federal Deposit Insurance Corp. (FDIC) has announced the addition of two European financial regulatory veterans to its Systemic Resolution Advisory Committee. This committee, composed of 19 members, advises the FDIC on various policy issues related to the resolution of systemically important financial companies. The two new members, Sir Jon Cunliffe and Elke Koenig, will join the committee meeting on December 5, 2023, to discuss the agency’s resolution authority under the Dodd-Frank Act.
Meet the New Members
Sir Jon Cunliffe, the first new member, brings a wealth of experience to the committee. He previously served as the deputy governor for financial stability at the Bank of England and held positions as the UK permanent representative to the European Union and the international economic advisor to the Prime Minister. With his expertise, Sir Jon Cunliffe will provide valuable insights into financial stability and regulatory matters.
The second addition to the committee is Elke Koenig, the former chair of the Single Resolution Board and former president of the German Federal Financial Supervisory Authority. As the head of the designated resolution authority for a subset of banks in the euro area, Koenig brings extensive knowledge in resolving bank failures. Her perspective will be crucial in developing effective resolution strategies.
The Role of the Committee
The FDIC’s Systemic Resolution Advisory Committee plays a vital role in advising the agency on the resolution of systemically important financial companies. Under the leadership of Chairman Martin Gruenberg, the committee’s charter was renewed in April, maintaining its structure and responsibilities established in 2011. The committee’s focus areas include analyzing the effects of a covered company’s failure on financial stability and economic conditions, assessing market understanding of resolution strategies, and coordinating global planning and preparation for the resolution of internationally active covered companies.
Important Issues at Hand
Resolution planning has been a significant concern for the FDIC this year, particularly following regional bank failures. To address these concerns, the FDIC has proposed tougher resolution planning requirements for banks with assets of $100 billion or more. Additionally, the agency has proposed enhancing resolution plans for domestic and foreign banks with U.S. branches having assets ranging from $250 billion to $700 billion. The FDIC has also announced new procedures for considering potential offers from acquirers for failed banks with over $50 billion in assets.
Frequently Asked Questions
1. What is the purpose of the FDIC’s Systemic Resolution Advisory Committee?
The committee advises the FDIC on various policy issues related to the resolution of systemically important financial companies, ensuring the stability of the financial system.
2. Who are the new members of the committee?
The new members are Sir Jon Cunliffe, former deputy governor for financial stability at the Bank of England, and Elke Koenig, former chair of the Single Resolution Board.
3. What issues will the committee address?
The committee will discuss the FDIC’s resolution authority under the Dodd-Frank Act, examine the effects of a covered company’s failure on financial stability and economic conditions, coordinate international planning for the resolution of globally active covered companies, and standardize resolution standards worldwide.
4. What recent proposals has the FDIC made regarding resolution planning?
The FDIC has proposed tougher resolution planning requirements for banks with assets of $100 billion or more and enhanced resolution plans for domestic and foreign banks with U.S. branches having assets ranging from $250 billion to $700 billion.
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