Over the past two months, the markets have been roiled by banks in financial distress. Some banks have received influxes of capital, while others were taken over by regulators or a.
Emerging markets bank support robust despite resolution regimes: Fitch ANI | Updated: Mar 13, 2021 14:14 IST
London [UK], March 13 (ANI): Government support for banks in emerging markets (EMs) is unlikely to weaken materially despite greater adoption of bank resolution regimes, Fitch Ratings has said.
The impact of resolution regimes on government support will depend on policy stances by authorities, framework specifics and the extent of banks loss-absorbing debt buffers for potential bail-ins. Fitch said it expects several factors to drive the development of resolution regimes in EMs.
They include efforts by international institutions like the Financial Stability Board and IMF to incentivise adoption; the desire to catch up with perceived best practice in developed markets; and the need to reduce the burden on governments supporting failing banks, particularly given increased debt and deficits due to the pandemic.