Most countries unprepared for bank failures, watchdog warns - Financial Times

A global financial watchdog has warned that most countries remain unprepared to manage bank failures, according to the Financial Times. The assessment points to gaps in national frameworks for handling a failing bank in an orderly way — the kind of planning that aims to protect depositors and limit disruption to the wider financial system.

The warning matters because bank resolution regimes are a core part of the post-2008 safety net. Rules on loss absorption, recapitalisation and cross-border coordination determine how quickly authorities can act when a lender runs into trouble. Where those frameworks are incomplete, the risk is that losses spill over to taxpayers or trigger broader market stress.

For markets, the takeaway is not a signal about any single bank, but a reminder that institutional readiness varies widely across jurisdictions. What to watch: follow-up assessments from global standard-setters, national progress on resolution planning, and whether cross-border cooperation keeps pace. These are slow-moving structural issues, yet they shape how resilient the financial system is when stress arrives.