The Financial Stability Board has warned that many countries are not ready to fund a failing bank in an emergency. The global watchdog published its findings on Friday.In a peer review, the FSB found that fewer than half of the jurisdictions it studied had funding arrangements that were clearly defined, large enough and ready to deploy quickly. The review checked progress against the board’s standards for resolving banks without taxpayer-funded bailouts.The work follows the banking turmoil of 2023, including the collapse of Credit Suisse.

The Swiss bank was taken over by UBS in a government-engineered rescue after severe liquidity stress, backed by emergency facilities and a government liquidity backstop.Recent bank failures showed how quickly lenders can come under acute stress, the FSB said. When depositors and short-term lenders lose confidence, cash can leave a bank in hours.The board recommends that authorities decide in advance what temporary public funding could be used, set a clear legal basis for support, and make sure losses can be recovered. A credible public-sector backstop is essential, it said.