The Federal Deposit Insurance Corp. has agreed to cooperate with China's central bank to address potential cross-border issues in resolving failing institutions.
The FDIC and the People's Bank of China entered into a memorandum of understanding that lays out plans to share information and cooperate to manage troubled banks during a crisis, the agency announced Thursday. The FDIC and the central bank agreed to collaborate on analyzing cross-border recovery and resolution issues for banks that operate in both the U.S. and China, by exchanging technical data and running simulations of different crisis scenarios.
The agreement updates a 2007 MOU between the FDIC and the People's Bank of China. It signals the two institutions' desire "to forge effective international working relationships, to demonstrate their commitment to the principles of comprehensive consolidated supervision and cooperation among banking agencies, and to enhance each party's role in financial regulatory initiatives and policy deliberations," it says.
"China and the U.S. have a shared interest in maintaining and expanding our interaction on economic and financial issues, particularly in the areas of deposit insurance and cross-border resolution issues,"said FDIC Chairman Martin Gruenberg in a news release.
In the past year, the FDIC has been trying to cooperate more broadly with foreign nations on cross-border resolution issues. Traditionally, the agency worked closely with regulators in the United Kingdom; this year, the agency has been reaching out to European regulators to address potential international resolution issues.