In the response letter IIF and GFMA raise concerns that the draft Guidance appears in some areas to provide insufficient emphasis on the group resolution plan agreed through CMGs. The industry would like to see more balance to provide guidance emphasizing a cooperative, group approach to resolution agreed in CMGs and led by home authorities. This in turn would advance the purposes of the FSB's approach to effective, efficient cross-border resolution, reducing the risk of local ring-fencing, fragmentation of approaches, and misallocation of resources as a result of the accretion of unnecessary levels of internal TLAC.
In the industry's view CMGs should avoid local requirements for excessive downstreaming of resources, which could lead to loss of internal flexibility and misallocation risk. The Guidance in its current form might be misinterpreted in a way that would lead to fragmentation and inefficient use of global resources.
The final Guidance should increase its focus on supporting firms' recovery and resolution strategies, which are now quite robust after lengthy work, debate and review.