Effective Resolution of Systemically Important Financial Institutions

The Global Financial Markets Association (GFMA), The Clearing House Association (TCH), the American Bankers Association (ABA), The Financial Services Roundtable (FSR), the Institute of International Bankers (IIB), and the Institute of International Finance (IIF) collectively, welcome the opportunity to comment on the Consultative Document on Effective Resolution of Systemically Important Financial Institutions published by the Financial Stability Board (FSB) on July 19, 2011 (Consultative Document).

The groups strongly agree with the overall objective of the Consultative Document – that authorities in all relevant jurisdictions should have the capacity to resolve systemically important financial institutions (“SIFIs”) without systemic disruption and without exposing the taxpayer to the risk of loss, within a reasonable timeframe. Taxpayer-funded bailouts have been chosen in the past, including during the recent global financial discrimination will be an impediment to cross-border resolutions of G-SIFIs. Instead, foreign and domestic deposits, and foreign and domestic depositors, should be treated as a single class in any depositor preference law.