Cross-Border Resolution
Resolution strategies for groups with subsidiaries or significant branches outside Denmark are developed in collaboration with the responsible authorities from the relevant countries through so-called resolution colleges. In these colleges, not only resolution authorities but also supervisory authorities, central banks, and ministries participate. Resolution authorities for parent companies and subsidiaries jointly agree on a resolution plan expected to be used in a resolution situation. If an institution becomes failing, the resolution college can revise the plan during the resolution if the circumstances favour a different strategy. The various tasks and procedures handled by resolution colleges are defined in an EU regulation, cf. Delegated regulation - 2016/1075 - EN - EUR-Lex. Coordination and collaboration among the authorities are essential for resolution colleges to fulfil their roles effectively.
Extensive coordination and communication across countries are necessary to prepare for potential resolution situations. Resolution colleges are tasked with establishing and testing operational procedures to ensure a functioning college in crisis situations. Throughout the year, resolution authorities maintain close and ongoing dialogue on resolution planning. These forums are crucial for exchanging viewpoints and ensuring readiness in the event of a cross-border institution's failure. As part of resolution planning, resolution colleges also discuss resolution strategies and resolution options.
International Authorities
The Financial Stability Board (FSB) was among the first to publish recommendations on resolution planning through the Key Attributes of Effective Resolution Regimes for Financial Institutions. The FSB also publishes reports on selected topics within resolution planning. The FSB was established to identify and assess vulnerabilities that could impact the global financial system, partly by promoting coordination and information sharing among financial stability authorities.
The European Banking Authority (EBA) publishes anually an evaluation of both resolution planning efforts, known as the European Resolution Examination Programme (EREP), and the work within resolution colleges, which involve collaboration between authorities, central banks, and ministries across borders:
Resolution authorities in other countries have also published information about their work on resolution strategies and options:
- Banking Union (EU): Within the strengthened banking cooperation, known as the Banking Union, the Single Resolution Board (SRB) serves as the resolution authority. The SRB published early guidelines on resolution options and followed up with more reports describing resolution strategies and options:
- United Kingdom: After Brexit, the UK became a third country relative to EU member states, including Denmark. However, the UK has established a resolution framework comparable to the EU's rules. The Bank of England has developed the Resolvability Assessment Framework (RAF) and publishes more reports on resolution strategies and options:
- Switzerland: Although Switzerland is not an EU member, it has a similar resolution framework. In 2022, prior to UBS's takeover of Credit Suisse as part of a resolution, Switzerland published a resolution report:
- United States: In the US, institutions themselves prepare resolution plans, whereas in the EU, UK, and Switzerland, resolution authorities create the plans. Some US resolution plans are publicly available here: