Businesses to have living wills for crisis plan
Share
Banks and big investment firms in the UK will be required to develop living wills setting out how they will cope if they hit financial difficulties without being bailed out by taxpayers.
The FSA this week published consultation and discussion papers on its proposals for recovery and resolution plans.
All UK-incorporated deposit takers, subsidiaries and significant investment firms with assets of over £15bn will need to implement RRPs.
Firms will have to produce recovery plans which should set out how capital shortfalls, liquidity pressures and profitability issues will be addressed. Firms will also have to produce resolution plans to show how they will wind down if they fail.
FSA executive committee member Thomas Huertas says: “By putting in place clear plans to recover from a crisis or wind down in an orderly manner, firms can take the necessary action to reduce the impact on financial stability and reduce taxpayer support.”
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
