The inaugural National Resolution Symposium (NRS) organised by Perbadanan Insurans Deposit Malaysia (PIDM) has today (Oct 18) gathered regulatory experts and practitioners from various jurisdictions in its to share and exchange views in managing or resolving financial institution failure and ways to navigate uncertainties.
The NRS was attended by 300 senior management leaders from Malaysia’s financial institutions.
The NRS emphasises the importance of resolution planning during business as usual (good times) to ensure an orderly resolution that minimises cost, disruption and is also effective in managing troubled member institutions.
“Recent and historical financial institution failures underscore the necessity of strategic planning to navigate uncertainties effectively. PIDM, as the resolution authority, plays a vital role in swiftly addressing failures relating to our member institutions and safeguarding the financial system’s stability,” said Rafiz Azuan Abdullah (pic), Chief Executive Officer of PIDM.
Rafiz said the timeliness of deliberating crisis management strategies, emphasising that formulating tailored plans during a crisis is challenging. He added that when done in advance, resolution planning also provides the resolution authority with options, including the creation of a bridge bank and recapitalisation and restructuring.
In addition, PIDM published a series of 25 case studies, offering valuable insights from the global experience of resolving troubled banks and insurers. The studies highlight the context and risk factors which contributed to the failure of those financial institutions as well as key lessons learnt, including the recent case of Silicon Valley Bank in the United States (US) and others from the Asia Pacific and European regions. A downloadable e-book of the Resolution Case Studies is also made available to the general public on PIDM’s website.
“By customising crisis management strategies through resolution planning to the specific entity and its unique circumstances, we enhance our ability to take decisive actions and minimise contagion risks to the broader financial ecosystem,” he added.
PIDM, as the resolution authority for its member institutions, collaborates with BNM and the Ministry of Finance to form a robust financial safety net. In September 2023, PIDM issued the Guidelines on Resolution Planning for Deposit-Taking Members, outlining the objectives, approach, and requirements for resolution planning.
