Explanation:
The presence of sufficient TLAC was a significant strength. It provided a buffer to absorb potential losses, making a bail-in strategy a viable option. This capacity is designed to protect taxpayers by ensuring that losses are first absorbed by shareholders and certain creditors. While a full bail-in was not ultimately executed, the availability of TLAC was crucial in managing the situation.
A is incorrect: Significant public sector support, in the form of liquidity backstops and guarantees, was utilized in the Credit Suisse case. B is incorrect: Cross-border cooperation, particularly through the Crisis Management Group (CMG), played a crucial role in coordinating the response. D is incorrect: While a commercial transaction (the acquisition by UBS) was the final outcome, the existence of TLAC and resolution plans provided strategic optionality.
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Q.6309 While the Credit Suisse case presented significant challenges, certain aspects of the international resolution framework proved to be strengths in managing the crisis. Which of the following was a key strength demonstrated in this case?
A
The complete avoidance of public sector financial support.
B
The absence of any need for cross-border cooperation.
C
The existence of substantial Total Loss-Absorbing Capacity (TLAC).
D
The exclusive reliance on commercial transactions to resolve the crisis.
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