FSB peer review report – Thematic review on public sector backstop funding mechanisms

On 9 October 2026, the Financial Stability Board (FSB) issued a peer review report on its thematic review on public sector backstop funding (PBF) mechanisms.

Background

The FSB adopted the Key Attributes of Effective Resolution Regimes for Financial Institutions (KAs) in 2011, to make it possible to resolve a failing financial institution without severe systemic disruption and without exposing taxpayers to loss, while preserving the institution’s critical functions.

KA 6 covers funding in resolution and refers to a recapitalised bank’s internal liquidity resources and private markets as the preferred source of funding in resolution. However, to the extent a bank’s own resources or market access to funding is not available or sufficient, KA 6 calls for a credible PBF mechanism to be in place, as a last resort, to enable the temporary funding needs of the bank to be met and to achieve an orderly resolution.  

The peer review report presents the findings of the FSB thematic peer review of PBF mechanisms. The review examines and evaluates the progress of FSB member jurisdictions in implementing KA 6

and the 2016 Guiding Principles on the Temporary Funding Needed to Support the Orderly Resolution of a Global Systemically Important Bank (2016 Guiding Principles).

Findings

Overall, the FSB found that jurisdictions have made progress since the adoption of KA 6. However, progress is uneven and incomplete. Only about one in five FSB member jurisdictions are fully compliant with KA 6, while about half have material gaps. The 2016 Guiding Principles state that “an effective public sector backstop funding mechanism should be available for use when necessary and appropriate.” In many jurisdictions, authorities have not clearly established how much temporary public funding would be available once a systemic bank enters resolution or how they would combine and coordinate multiple funding sources, if needed.

The peer review report recommends that jurisdictions take steps to close any implementation gaps. This includes: establishing clear and credible public backstop funding arrangements, which can provide liquidity at the scale and speed required for orderly resolution; strengthening operational readiness through governance and testing; and establishing robust arrangements to recover losses, protect taxpayers, and mitigate moral hazard.