The Financial Services Authority on Tuesday published its proposals for financial institutions to identify how they would cope in the event of a financial crisis, including the provision of a sufficient-capital safety net and a blueprint detailing how to close the institution down smoothly if it reaches the point of no return.

After governments spent billions on bailouts during the banking crisis in 2008, regulators worldwide want to ensure that financial firms have effective recovery and resolution plans in place so that they can cope better in the event of a subsequent crisis.