The Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan held a roundtable with market participants to discuss a new mechanism for dealing with insolvent banks being developed under a draft new law on banks and banking. The draft framework is positioned as a modern resolution system aligned with international standards while reflecting domestic market features, with the stated objectives of protecting depositors, reducing systemic risk and minimising the use of budget funds in crises. The draft law would embed a three-level crisis-management architecture, supported by an enhanced early-intervention regime that gives the supervisor more tools as soon as difficulties emerge and requires banks to take corrective actions as indicators deteriorate. Each bank would be required to maintain a regulator-agreed recovery plan setting out measures shareholders and management will take to restore financial resilience, with a resolution mechanism triggered if commitments cannot be met. For systemically important banks, the proposal includes a Total Loss Absorbing Capacity (TLAC) requirement to ensure sufficient capital and debt instruments are pre-positioned for write-down or conversion, so losses are absorbed by shareholders and investors rather than public funds. Direct state participation would be limited to exceptional cases where market tools are insufficient and the bank poses systemic risk, subject to strict conditions including transparency, minimal interference and mandatory application of the No Creditor Worse Off (NCWO) principle. Design of the tools referenced experience from jurisdictions including the European Union, the United Kingdom, South Korea and Canada, drawing on international principles reflected in G20 and Basel Committee materials, while international experts shared approaches in which any public funds used as a last resort are subsequently recovered from shareholders and the banking system.

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