The Monetary Authority of Singapore has updated its monograph explaining how it prepares for and manages the failure of financial institutions under its purview. The framework does not seek to prevent every failure. Instead, it provides for intensified supervision and recovery measures as a firm deteriorates, followed by orderly resolution when the firm is, or is likely to become, nonviable and has no reasonable prospect of recovery. More stringent recovery and resolution planning requirements apply to systemically important institutions, with firms responsible for recovery plans and MAS responsible for resolution plans and resolvability assessments. MAS may use business or share transfers, bridge entities, asset management companies, bail-in, insurer run-off and liquidation, individually or in combination. It prefers private sector solutions and requires losses and costs to be borne first by the failed institution, its shareholders and unsecured subordinated creditors, with remaining costs generally recovered from the relevant industry after resolution. The framework also covers financial market infrastructures, protects creditors through the no creditor worse off than in liquidation safeguard and protected financial arrangements, and provides for coordinated action with foreign resolution authorities.
2026-09-11Monetary Authority of Singapore
Monetary Authority of Singapore updates monograph on financial institution resolution, covering planning, funding and creditor safeguards
The Monetary Authority of Singapore has updated its monograph on preparing for and resolving nonviable financial institutions, with stricter planning expectations for systemically important firms. The framework sets out MAS’ resolution tools, industry funded cost recovery, creditor safeguards and approach to financial market infrastructures and cross-border cases.