In this proposal, the Financial Stability Board (FSB) expands its “key attributes” for orderly resolution initially designed for banks to non-bank financial institutions that are either systemic or operationally critical. Covered entities include financial market infrastructure (FMI) firms that are dubbed financial market utilities in the U.S., insurance companies, and firms holding assets under management. Here, we build on FedFin’s prior analysis of the standards as they would apply to insurers, to assess their impact on FMUs and all of the financial institutions dubbed FMU “participants.” The new recovery and resolution standards are designed to make FMUs more resilient and less likely to require taxpayer support. However, the scope of the new rules and their potential cost, risk to participants, and complexity could also further complicate establishment of the central clearing entities deemed essential by policy-makers to reduce systemic risk in the global financial marketplace.

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