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This is with a view to develop a facility, or facilities, that would be available to resolution authorities were they ever required to address potential liquidity issues following a firm’s entry into resolution.
Several jurisdictions have already considered this in light of recent FSB guidance on the topic and have implemented such facilities.
AFME encourages the same considerations be made within the European Union and suggest several ideas that AFME hopes prompt further debate on such a new resolution liquidity facility. This discussion paper considers the important role of the availability of liquidity to support a bank through resolution, including the need for a public backstop lender of last resort for liquidity purposes.
AFME encourages policy makers, in particular those within the European Commission, European Central Bank, and the Single Resolution Board, to work together with national resolution authorities and national central banks to deliver on a credible and transparent framework for liquidity in resolution and welcome the views of interested parties on the issue.