FSA publishes consultative paper on "living wills"
Mandated by the Financial Services Act 2010 in the UK, “living wills” require financial institutions to outline plans to recover from a crisis (e.g. by selling assets etc.) and to enable an orderly liquidation without endangering financial stability. Every institution managing client’s money with assets over £15bn, including subsidiaries of foreign groups, will have to draw up the wills and review them yearly.
This exercise is separate to the work of the Independent Commission on Banking, which recommended ringfencing of the deposit-taking bank in a larger group, although the implications of both clearly overlap.
