Soledad Núñez, the Deputy Governor of the Bank of Spain and chair of the Financial Stability Board peer review, said a credible public-sector funding backstop was essential when banks run into trouble.
The Financial Stability Board released its review on 9 October 2026, measuring 19 jurisdictions against Key Attribute 6 of its post-crisis bank-resolution framework. China was rated materially non-compliant, placing it alongside Australia, Brazil, the European Union and Switzerland.
The standard addresses a particular gap in a bank rescue. Authorities must have credible access to temporary public funding when a failing bank cannot find enough liquidity from its own resources, private markets or ordinary central-bank facilities. A bail-in can leave a bank with a stronger balance sheet while it still lacks the cash to meet deposit withdrawals or market obligations as confidence returns.
The review followed the banking turmoil of 2023, when several lenders came under severe liquidity pressure in a short period. Credit Suisse suffered severe liquidity stress that year before UBS took it over in a government-engineered rescue. The transaction drew on emergency liquidity facilities and a government liquidity backstop, alongside the write-down of Additional Tier 1 bonds.
The FSB assessed whether each jurisdiction had a mechanism that was clearly defined, sufficiently large and quick to deploy. Fewer than half of the 19 jurisdictions met the test of having arrangements that were clear, scalable and operationally ready.
Only four jurisdictions fully complied with the international standards for funding systemic banks through resolution: Hong Kong, Japan, the United Kingdom and the United States. Argentina and India were rated non-compliant. Canada, Mexico, South Africa, South Korea and Singapore were largely compliant.
Australia’s arrangements include a A$20 billion limit per authorisation for the Treasury’s Financial System Stability Special Account. The FSB review, however, focused on public-sector backstop funding rather than every tool that authorities could use during a banking crisis.
The review also found weaknesses in arrangements to recover residual losses from the financial industry. That can leave taxpayers exposed.
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