Systemic Support for Banks

In the wake of the financial crisis, many governments have asserted that bank creditors should not expect to receive the same level of systemic support in the future. Many governments are changing their laws and regulations to allow for the use of enhanced resolution powers, good bank/bad bank structures, and/or bail-ins. These changes are intended to make it easier for governments to impose losses on bank creditors; i.e., require "burden sharing."

Because our Bank Rating Methodology incorporates an assessment of the probability that government support would be forthcoming in times of stress, some banks benefit from rating "uplift." We thus closely monitor proposed changes to regulatory regimes and their potential implications on the various classes of bank creditors to determine whether to reduce or even eliminate our assumptions of support.  This page provides a centralized source for Moody’s publications in which we express our opinion on the wide array of legislative and regulatory reforms being introduced globally.