• FDIC and the China Banking Regulatory Commission Agree to Strengthen Crisis Management and Potential Resolution of Banks Active in Both U.S. and China
  • June 3, 2010 | Author: Darren M. Cooper
  • Law Firm: Alston & Bird LLP - Washington Office
  • Today, the FDIC and the China Banking Regulatory Commission (CBRC) announced an agreement to "significantly strengthen" cooperation on contingency planning, coordination, and information sharing related to crisis management and the potential resolution of banks active in the two countries. The CBRC is already party to a memorandum of understanding with the FDIC, Federal Reserve, OCC and OTS.  In connection with this announcement, the FDIC and CBRC entered into an Appendix to that Memorandum of Understanding in which they have agreed to:

    • Improve mutual understanding about their respective national regulations and laws on bank insolvency;

    • Cooperate in developing resiliency and resolution plans for banks operating in both the U.S. and China;

    • Conduct joint contingency planning to improve readiness for any future resolutions;

    • Enhance information exchanges about developing issues and cross border financial institutions during periods of financial stress; and

    • Develop closer coordination in the implementation of their resolution responsibilities in any future crisis involving banks operating in both countries.

    FDIC Chair Sheila Bair stated that "As banking operations have become increasingly global, it has proven critical for the various governmental resolution authorities to have the appropriate framework in place to ensure cooperation and communication should an institution become troubled."  Furthermore, the agreement with the CBRC is "an invaluable step forward toward implementing" the recommendations of the Basel Committee's Cross Border Bank Resolution Group, which the FDIC co-chaired.