Federal Deposit Insurance Corporation and Bank of England memorandum on resolving globally active systemically important financial institutions

The cross-border co-ordination necessary for the successful resolution of global systemically important financial institutions (G-SIFIs) has emerged as a major issue in the post-crisis reforms. In particular, the Financial Stability Board addressed this issue in its "Key Attributes of Effective Resolution for Financial Institutions", adopted in 2011. However, little exists by way of operational machinery to give effect to the Key Attributes. The memorandum of December 2012 setting out the understandings of the resolution authorities in the US and the UK as to how they will effect a "single point of entry" resolution of a G-SIFI is thus an important first step. This article analyses the agreement, identifying the conditions necessary for it to operate successfully. It is noted that, for understandable reasons, both countries have also put in place resolution mechanisms which do not depend upon appropriate action by the home-state regulator.