Principles on Bail-in Execution

This guidance sets out principles for authorities to consider as they develop plans for the effective execution of bail-in resolution strategies for global systemically important banks (G-SIBs).

Bail-in within resolution is at the core of resolution strategies for G-SIBs. It helps achieve a creditor-financed recapitalisation by way of a write-down and conversion of liabilities into equity that minimises impacts on financial stability, ensures the continuity of critical functions, and avoids exposing taxpayers to loss.

The guidance sets out principles to assist authorities as they make bail-in resolution strategies operational. The principles cover:

• disclosures on the instruments and liabilities within the scope of bail-in;
• valuations to inform and support the application of bail-in;
• processes to suspend or cancel the listing of securities, to notify creditors, and to deliver new securities or tradeable certificates following entry into resolution;
• securities law and securities exchange requirements during the bail-in;
• processes for transferring governance and control rights to a new board and management for the firm emerging from resolution; and
• communications to creditors and the market at large.

The FSB consulted on the guidance in November 2017 and this final version of the guidance incorporates changes to reflect public feedback.