FSB Peer Review: Public Sector Backstop Funding Mechanisms

Detected March 12th, 2026

Summary

The Financial Stability Board (FSB) is conducting a thematic peer review on public sector backstop funding mechanisms and has issued a summary of terms of reference. The FSB is seeking feedback from financial institutions and other stakeholders by March 31, 2026, to inform its review of implementation progress.

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What changed

The Financial Stability Board (FSB) has initiated a thematic peer review to assess the implementation of public sector backstop funding mechanisms by its member jurisdictions, focusing on Key Attribute 6 of effective resolution regimes and the Guiding Principles for temporary funding of G-SIBs. The review aims to examine the nature, credibility, and capabilities of these mechanisms, including their design features, conditions to mitigate taxpayer losses and moral hazard, and challenges in funding resolution. The FSB has distributed a questionnaire and is actively soliciting feedback from financial institutions, industry associations, academics, and other stakeholders.

Regulated entities, particularly financial institutions and their advisors, should prepare to provide feedback on their experiences and challenges related to public sector backstop funding mechanisms. The deadline for submitting comments is March 31, 2026. The findings of this peer review are expected to influence future guidance and best practices for resolution planning and funding, potentially leading to revised requirements or expectations for banks regarding their systemic importance and resolution preparedness. Failure to engage could result in a less representative input into the FSB's final report and subsequent policy considerations.

What to do next

Review the FSB's Summary Terms of Reference for the peer review on public sector backstop funding mechanisms.
Prepare and submit feedback on experiences and challenges with public sector backstop funding mechanisms by March 31, 2026.
Assess current resolution planning and funding arrangements in light of the peer review's objectives.

Source document (simplified)

Publications Peer Review Reports Thematic Peer Review on Public Sector Backstop Funding Mechanisms: Summary Terms of Reference
The FSB adopted the Key Attributes of Effective Resolution Regimes for Financial Institutions in 2011, with the aim of facilitating the resolution of financial institutions without severe systemic disruption or taxpayer losses, while protecting vital economic functions. One element of an effective resolution regime is a public sector backstop funding mechanism, which, if needed as a last resort, can provide temporary funding to firms in resolution to support orderly resolution.

The objective of the review is to examine progress made by FSB member jurisdictions in implementing Key Attribute 6 and the Guiding Principles on the Temporary Funding Needed to Support the Orderly Resolution of a Global Systemically Important Bank (“G-SIB”). The Summary Terms of Reference provides more details on the objectives, scope, and process for this review.

The FSB has distributed a questionnaire to FSB member jurisdictions to collect information. In addition, as part of this peer review, the FSB invites feedback from financial institutions, industry and consumer associations, academics, and other stakeholders on the implementation of public sector backstop funding mechanisms. This could include comments on:

how financial stability vulnerabilities associated with the liquidity needs of a G-SIB, or banks that may be systemically significant or critical if they fail (“banks systemic in failure”), during resolution differ across jurisdictions, and how these vulnerabilities are evolving;
the nature, credibility, and capabilities of public sector backstop funding mechanisms for banks in FSB jurisdictions, including:
- the key design features of public sector backstop funding mechanisms to ensure their temporary, last-resort use to achieve an orderly resolution of a G-SIB or banks systemic in failure;
- the conditions and provisions that mitigate taxpayer losses and minimise moral hazard risk;
experiences and challenges in addressing funding in resolution, and implications for public sector backstop funding mechanisms. The peer review report is expected to be published in October 2026.

Feedback should be submitted by 31 March 2026 to [email protected] under the subject heading “FSB Thematic Peer Review on public sector backstops”.

Individual submissions, unless requested otherwise, will be made public on the FSB’s website.

Related Information

13 November 2024 The importance of resolution planning and loss-absorbing capacity for banks systemic in failure: Public statement

Statement outlines considerations to enhance the resolution preparedness of banks that may be systemically significant or critical if they fail.

25 April 2024 Key Attributes of Effective Resolution Regimes for Financial Institutions (revised version 2024)

This version of the Key Attributes incorporates additional guidance on financial resources and tools to support the orderly resolution of a central counterparty (CCP).

18 August 2016 Guiding principles on the temporary funding needed to support the orderly resolution of a global systemically important bank (“G-SIB”)

FSB guiding principles on funding in resolution to ensure that temporary funding is available to enable the effective resolution of G-SIBs without bail-out by the public sector. Content Type(s): Peer Review Reports Publications Source(s): FSB Policy Area(s): Resolution and Crisis Management