Market prices suggest that investors are now pricing the risk of having losses imposed on them in the event of a bank failure. For most jurisdictions that are home to G-SIBs, credit rating agencies no longer assume governments will bail them out. Recovery and resolution planning has improved banks’ capabilities to produce timely, accurate and granular information.
Timely information in a crisis is key to assessing the scale of a problem and to deciding what to do about it. This additional information has already proved helpful to both banks and authorities during the pandemic.