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The recent banking turmoil in the US and in CH has raised doubts on the functionality of the current framework of market exits for systemically important banks. On the one hand, the authorities managed recent market exits quickly with minimal repercussions on financial stability or the real economy. On the other hand, public funds were necessary to resolve the crises: central banks provided liquidity assistance loans beyond emergency liquidity assistance and the public provided, inter alia, default guarantees for these loans; deposit insurance was extended beyond the statutory limits.
In this panel discussion we aim to distill the lessons learnt for the framework of market exits of systemically important banks:
see also, SUERF Policy Note, Issue No 293: The EU macroprudential review should prioritize removing regulatory overlaps and increasing the flexibility of the CCyB