In the financial sector, streamlining regulations can unlock sustainable growth, but when it chips away at safeguards, it risks destabilising the very foundation of that growth, experts cautioned at Perbadanan Insurans Deposit Malaysia’s (PIDM) National Resolution Symposium (NRS) 2025.
Themed “Precaution Over Reaction: Harvesting Readiness in an Uncertain World”, the event held on August 26 and 27 at the Connexion Conference and Event Centre, Bangsar South, brought together nearly 500 senior financial leaders, regulators, and international experts to discuss collaborative strategies for strengthening resolution planning and collectively reinforcing the resilience of the Malaysian financial system.
At a panel on “Resolution Planning in the Era of Deregulation”, speakers agreed that deregulation must not compromise financial stability. Instead, they advocated for smarter, more efficient rules that preserve robust safeguards and enable orderly resolution of failing institutions.
In today’s volatile environment, they stressed that robust exit mechanisms and effective resolution planning contribute to the orderly wind-down of financial institutions without triggering broader economic disruption.
Moderated by Afiza Abdullah, Executive Vice President of PIDM, the panel featured Dr Elke König, former Chair of the EU Single Resolution Board and Senior Policy Fellow at SAFE, Frankfurt; Geoff Davies, Director of the Resolution Directorate at the Bank of England; and Maciej Szczęsny, President of the Management Board of Poland’s Bank Guarantee Fund.
Panellists cautioned that deregulation should not be viewed as a trade-off between growth and stability. Davies underscored that financial stability is a cornerstone of sustainable growth, and that resolvability offers a cost-effective way to preserve it.
“A clear framework ensures that failure, when it happens, can be managed without destabilising the wider system,” he said, adding that credible resolution frameworks also encourage institutions to adopt preventive measures that reduce the likelihood of failure.
Dr König emphasised that today’s environment, marked by increasingly unpredictable and difficult-to-quantify risks, requires forward-looking scenario planning. She pointed out that effective resolution planning is ultimately about protecting taxpayers from bearing the costs of bank failures, noting that the lessons from the 2008 global financial crisis must not be forgotten.
Drawing from Poland’s experience, Szczęsny highlighted the importance of testing resolution frameworks and learning from real-world cases. He noted that liquidity-driven crises often unfold rapidly, leaving little time to react, making pre-emptive planning and flexible tools essential to preserving stability.
The panel also shared insights from recent cases, including the Bank of England’s management of Dunfermline Building Society and Silicon Valley Bank’s UK subsidiary, as well as the European resolutions during the 2017 Spanish banking crisis and following the 2022 Russian invasion of Ukraine. These experiences underscored the importance of optionality in resolution planning, even if flexibility comes at a cost.
The panel concluded that in a deregulatory environment, resilience is the true measure of competitiveness. Resolution planning not only mitigates risks but also incentivises better risk management and governance within financial institutions.
Summing up the discussion, Afiza remarked, “The challenge for authorities and the industry is to stay proactive, anticipate emerging risks, and maintain readiness. In a deregulatory era, resilience—not just efficiency—is the ultimate measure of competitiveness.”