market confidence right away. with this in mind, the brrd explicitly requires resolution authorities to exclude the use of extraordinary liquidity support when developing resolution plans. in fact, the bank should ideally be able to repay any emergency liquidity support before resolution. it ’ s all in the name : ela is intended for emergency situations. after a credible resolution, one should assume that the emergency has been dealt with and that ela is no longer needed. that ’ s why we need to address this elephant in the room. we need to tackle the issue of funding in resolution. new instruments may be needed. we can ’ t assume that with their limited resources, the central bank or resolution fund will fully take care of funding in and immediately after resolution. even a well - recapitalized bank may experience increased liquidity needs generated by market volatility, and by asymmetrical information on the bank ’ s viability. market participants may be discouraged from providing liquidity – and existing creditors may be encouraged to run – if there is uncertainty over the new entity ’ s ability to meet increased liquidity needs. for banks that are solvent and sound following resolution, the first port of call would then be the standard liquidity facilities of central banks. having said that, resolution authorities and banks cannot take liquidity support for granted. and prolonged support should in any case not be factored in ex ante as part of the solution. this is because, firstly, central banks will critically assess the viability of the bank post - resolution and need assurance that support would indeed be only temporary. second, the bank needs to have sufficient eligible collateral, after haircuts, to access central bank facilities. while this may seem obvious, there is a risk that such collateral has been largely pledged in the run up to resolution. in addition, the provision of ela itself could effectively postpone the point of resolution, while further reducing the availability of collateral during and after resolution. in that sense, central banks and resolution authorities have a common interest in resolving banks in a timely manner, i. e. before asset encumbrance reaches uncomfortably high levels and collateral runs out. in short, don ’ t forget about funding in resolution. sources of funding – including private ones – should be identified and prepared in tranquil times and quantified conservatively. asset encumbrance should be closely monitored and timely intervention may be required to assure sufficient funding in resolution. let me briefly restate my main

certain economies. this has been an important area of work for the fsb. in 2022, we published a report looking at trends in the structure of emes'external borrowing, focusing on the shift towards non - bank financing. the report examined how these developments contributed to the build - up of vulnerabilities in emes and to the march 2020 turmoil. it discussed policy issues that could be considered when thinking about measures to limit these vulnerabilities. this included measures to tackle the build - up of foreign exchange mismatches ; enhance crisis management tools ; and address data gaps to facilitate risk monitoring and the timely adoption of policies. the fsb also stressed the importance of ongoing work to address vulnerabilities from liquidity mismatches in open - ended funds, which would also help bolster the resilience of emes'financial systems. i am therefore happy to report that the fsb is finalising its policy recommendations to address structural vulnerabilities from liquidity mismatch in open - ended funds, working in close coordination with iosco. 2 / 3 bis - central bankers'speeches enhancing the resilience of the nbfi remains a key priority for the fsb in 2024. the fsb will also continue to build on the lessons from the march 2023 turmoil and to monitor macro - financial vulnerabilities in a higher interest rate environment. let me conclude. vulnerabilities in the global financial system remain elevated. tightening financial conditions and high levels of debt create challenges for both bank and non - bank lenders. in tackling the challenges ahead, formulating policy responses and building resilience, it is essential that there is global coordination and that we pay attention to potential cross - border spill - overs. gatherings like today's forum are an important way of exchanging views and identifying the different ways in which governments and international organisations can work to enhance the resilience of our global financial system. as i mentioned earlier, regional perspectives matter a great deal, and amro's financial stability report is therefore a welcome contribution to the global dialogue on vulnerabilities. for our part, the fsb will remain focused on building resilience, so that the financial system can continue to play its part in building strong, sustainable, inclusive, and balanced growth. thank you. 3 / 3 bis - central bankers'speeches