Financial Stability Institute publishes report on Latin American cross-border crisis simulation exercise

Press release  | 
13 October 2021

Financial authorities in six South American jurisdictions participated in March 2021 in a cross-border crisis simulation exercise (CSE) to test their financial crisis managements arrangements.1 The Financial Stability Institute (FSI) of the Bank for International Settlement (BIS) today published a report on the findings of that exercise.

The CSE's objective was to enable the participating authorities to assess the effectiveness of their crisis management frameworks and cross-border cooperative arrangements in a controlled environment. It also allowed them to identify areas for improvement.

The exercise involved 11 central banks, supervisory authorities and deposit insurers2 from Argentina, Brazil, Chile, Colombia, Paraguay and Uruguay in an invented scenario based on the failure of a fictional regionally systemic cross-border banking group.

The report contains general findings and recommendations on topics including crisis management tools, recovery and resolution planning, liquidity and resolution funding, domestic decision-making procedures, and cross-border cooperation and information-sharing.

1 The exercise was coordinated by the Financial Stability Institute of BIS with the support of the Association of Supervisors of Banks of the Americas (ASBA).

2 The following authorities participated in the exercise: the Central Bank of Argentina, the Central Bank of Brazil, the Central Bank of Chile, the Central Bank of Colombia, the Central Bank of Paraguay, the Central Bank of Uruguay, the Corporation for the Protection of Bank Deposits of Uruguay (COPAB), the Deposit Guarantee Fund of Brazil (FGC), the Financial Institutions Guarantee Fund of Colombia (Fogafín), the Financial Market Commission of Chile and the Financial Superintendency of Colombia (SFC).