ROBUST, TRUSTED, DYNAMIC AND
PURPOSEFUL FINANCIAL CENTRE
- A ROBUST FINANCIAL CENTRE
- Industry Tests
- Enhancing the Resolution Regime
- International Supervisory Cooperation
- Securities, Futures and Over-the-Counter Derivatives
- Sectoral Security Operations Centre
A ROBUST FINANCIAL CENTRE
ENHANCING THE RESOLUTION REGIME
In June 2015, MAS published a policy consultation on proposals to enhance MAS' resolution regime to promote the orderly and efficient resolution of distressed financial institutions, taking into account the Financial Stability Board (FSB)'s Key Attributes of Effective Resolution Regimes for Financial Institutions and circumstances in Singapore. MAS proposed recovery and resolution planning requirements for financial institutions that are systemically important or that perform critical functions. These financial institutions are also required to adopt measures to address deficiencies in their recovery plans, and remove impediments to resolvability.
To facilitate orderly resolution, MAS proposed to have powers to impose temporary stays on early termination rights of financial contracts. Temporary stays can also be applied to contracts that are nonfinancial in nature, but that are necessary to ensure continuity of essential services and functions of a financial institution. We also proposed to have powers to recapitalise a financial institution by writing down its unsecured subordinated creditor claims or by converting them into equity stakes in the financial institution.
MAS also consulted on a creditor compensation framework, and proposed to fund costs relating to resolution expenses through ex-post funding arrangements.