Bank Recovery, Resolution and Future Regulatory Developments

Introduction and context

Bank failure is not merely the failure of an individual commercial enterprise. Banks transform short-term, confidence-sensitive liabilities into loans and other longer-term assets; they provide payment services; and they are connected through financial markets and correspondent relationships. Consequently, distress at one institution can spread through withdrawals, asset-price declines, payment disruption and loss of confidence. Banking regulation therefore seeks not only to prevent failure, but also to ensure that a failing bank can be handled without disorderly contagion or unnecessary use of public funds.

Modern bank crisis management rests on four linked ideas. First, depositors and other creditors require protection from avoidable losses and delays. Second, a bank should prepare in advance for severe stress through recovery planning. Third, authorities need credible resolution powers and operational capacity before a crisis occurs. Fourth, cross-border and forward-looking risks—including climate change, cyber incidents and technology concentration—must be incorporated into supervisory and resolution frameworks.

This chapter examines deposit insurance, recovery planning, resolution strategies, bail-in, living wills, crisis coordination and future regulatory priorities. The central distinction is that recovery is conducted by the bank as a going concern, whereas resolution is imposed or directed by authorities when recovery is no longer credible or the bank is failing or likely to fail.

Learning objectives

By the end of this chapter, students should be able to:

1. Explain the economic purpose and design choices of deposit insurance.
2. Distinguish recovery planning from resolution planning and describe the role of living wills.
3. Compare liquidation, sale of business, bridge-bank, asset-separation and bail-in strategies.
4. Explain the creditor hierarchy, loss allocation and safeguards associated with bail-in.
5. Analyse cross-border coordination and the institutional roles of supervisory and resolution authorities.
6. Evaluate emerging priorities involving climate-related financial risk, operational resilience, technology and Basel implementation.
7. Apply these concepts to a practical bank-failure scenario.

1. Deposit insurance and depositor protection

1.1 Purpose and rationale

Deposit insurance is a formal arrangement under which eligible depositors receive compensation, up to a specified limit, if a member bank fails. Its principal objectives are to protect small depositors, reduce incentives for destabilising withdrawals and support confidence in the financial system. It also permits authorities to close or resolve a bank without requiring every depositor to determine independently whether the institution is safe.

Deposit insurance addresses an information and coordination problem. A depositor may withdraw because other depositors are withdrawing, even when the bank's assets would ultimately be sufficient to meet liabilities. Insurance can interrupt this self-reinforcing dynamic. It is not, however, a guarantee that every creditor or every deposit will be repaid.

1.2 Design choices

Important design choices include:

• Coverage limit: the maximum amount protected per depositor, per bank, and sometimes per ownership category.
• Covered products: ordinary retail deposits may be protected, while equity, subordinated debt, investment products and some interbank balances may be excluded.
• Funding method: schemes may be funded ex ante through regular premiums, ex post through assessments after failure, or by a combination.
• Premium structure: flat premiums are simple but may ignore risk; risk-based premiums better reflect institutional risk but require reliable measurement.
• Payout method: the insurer may pay depositors directly, transfer deposits to another institution or support a resolution transaction.
• Public backstop: governments or central banks may provide temporary liquidity or borrowing capacity, subject to legal authority and safeguards.

A useful operational measure is the coverage ratio:

Here, insured deposits and total deposits are measured in the same currency and for the same population and period. The ratio indicates the proportion of deposit liabilities protected by the scheme; it does not measure the scheme's financial adequacy. A scheme may cover a high proportion of depositors but a smaller proportion of the total value of deposits, because large balances are often only partly insured.

1.3 Moral hazard and market discipline

Deposit insurance can create moral hazard. If depositors believe that their funds are protected regardless of bank risk, they have less incentive to monitor management or demand risk-sensitive interest rates. Banks may then have incentives to expand into high-risk activities, particularly where shareholders benefit from upside gains while losses are partly transferred to the insurance fund or taxpayers.

Controls include limited coverage, exclusions, risk-based premiums, prompt corrective action, strong supervision, credible management accountability and loss allocation to shareholders and uninsured creditors. The policy challenge is to balance financial stability against market discipline. Unlimited or poorly designed guarantees may prevent immediate panic but can weaken incentives over time.

1.4 Deposit insurance and resolution

Deposit insurance is one component of a broader safety net. It must be coordinated with bank supervision, lender-of-last-resort facilities and resolution authorities. A deposit insurer may act as payout administrator, contributor to a resolution transaction or member of a crisis-management committee. The least-cost principle, where applicable, generally requires the insurer to compare the cost of alternative interventions with the cost of paying insured depositors after liquidation.

An effective scheme also requires accurate depositor records. Banks must be able to identify eligible accounts, ownership categories, beneficiaries and balances quickly. Poor data quality can delay payouts precisely when public confidence is most fragile.

2. Recovery planning: restoring viability

2.1 Meaning and purpose

A recovery plan describes how a bank would restore its financial and operational position after severe stress while remaining a going concern. It is prepared by management and reviewed by supervisors. Recovery planning does not assume that public authorities will rescue the bank; instead, it identifies actions that management can take using the bank's own resources and contractual powers.

A credible plan normally contains:

1. Governance: responsibilities of the board, senior management, risk function and crisis team.
2. Stress scenarios: capital depletion, liquidity outflows, market disruption, cyberattack, operational failure and reputational damage.
3. Early-warning indicators: metrics that trigger escalation before formal regulatory minima are breached.
4. Recovery options: asset sales, capital raising, liability management, expense reduction, business-line disposal, funding substitution and restrictions on distributions.
5. Impact analysis: estimated effects on capital, liquidity, profitability, customers, payment systems and other entities.
6. Execution barriers: legal, tax, operational, market and communication constraints.
7. Playbooks: clearly assigned actions, decision rights, timelines and required data.

Recovery indicators should not be treated as mechanical substitutes for judgement. A bank may need to act before a threshold is breached if market confidence is deteriorating rapidly. Conversely, a temporary breach may not require asset sales if credible funding and capital actions are immediately available.

2.2 Recovery options and credibility

A recovery option is credible only if it can be executed under stress. For example, a planned capital raising may be unrealistic if the bank's share price has collapsed and investors cannot complete due diligence. Similarly, a planned asset sale may produce little liquidity if the assets are illiquid or encumbered.

Supervisors therefore examine execution time, valuation uncertainty, legal authority, operational dependencies and possible effects on other institutions. Options should be tested through simulations and should include communications plans. Uncoordinated public statements can intensify a run even when the underlying recovery action is sound.

3. Resolution planning and living wills

3.1 Resolution as an orderly failure process

Resolution is the process by which an authorised authority manages a bank that is failing or likely to fail, where ordinary insolvency proceedings would not adequately protect the public interest. Resolution aims to preserve critical functions, maintain financial stability, protect insured depositors, minimise taxpayer exposure and allocate losses to investors and creditors according to law.

A bank may be resolved even if some parts of the group remain viable. The objective is not necessarily to preserve the legal entity or all business lines. It is to preserve economically important services while allowing non-viable activities to exit.

3.2 Living wills

A living will is a practical description of how a systemically important bank could be resolved. It normally includes a group structure, critical functions, material legal entities, intra-group exposures, payment and settlement dependencies, operational services, funding arrangements, data requirements and preferred resolution strategies.

The document is valuable only when it is operationally usable. Resolution authorities may require changes to remove obstacles such as excessive complexity, uncertain ownership of assets, inadequate loss-absorbing capacity, dependence on undocumented shared services or inability to separate critical activities.

A living will differs from a recovery plan in ownership and purpose:

3.3 Resolvability

Resolvability is the extent to which a bank can be resolved without severe systemic disruption or extraordinary public support. It depends on more than capital. Relevant dimensions include:

• sufficient loss-absorbing and recapitalisation capacity;
• separable legal entities and business lines;
• reliable management information;
• continuity of payment, clearing, custody and settlement services;
• access to liquidity during resolution;
• operational continuity and tested technology;
• enforceable contracts and recognition of resolution actions across jurisdictions; and
• clear communications to depositors, employees, counterparties and markets.

A bank may appear well capitalised but still be difficult to resolve if its records are fragmented, critical services are provided by a failing affiliate or its derivatives contracts can be terminated immediately by counterparties.

4. Resolution strategies

4.1 Liquidation and payout

Under liquidation, the bank's assets are collected and sold, liabilities are settled according to the legal hierarchy and insured depositors are compensated. This may be appropriate for a small, non-systemic bank where critical functions can be replaced. It may be slow and value-destructive when assets are complex or when the bank provides essential payment or credit services.

4.2 Sale of business or purchase-and-assumption

A healthy institution may purchase some or all of the failed bank's business. Deposits and selected assets can be transferred, reducing disruption to customers. The buyer may require loss-sharing, guarantees or an asset-quality review. The method is efficient when a buyer can be found quickly, but it may be unavailable during a system-wide crisis.

4.3 Bridge bank

A bridge bank is a temporary institution controlled by the resolution authority. Critical deposits and assets are transferred to it while the authorities restructure, sell or wind down the remaining business. This provides continuity but requires skilled management, funding, legal authority and a realistic exit strategy.

4.4 Asset separation

Problematic assets may be transferred to an asset-management vehicle for orderly disposal. Separating troubled assets can make the continuing bank easier to sell or recapitalise. The approach can, however, delay recognition of losses and create valuation disputes. It must not become a mechanism for concealing losses or subsidising shareholders.

4.5 Bail-in

Bail-in is the statutory or contractual conversion or write-down of certain liabilities to recapitalise the failing bank. Unlike a bailout, which relies on public funds, bail-in places losses primarily on shareholders and eligible creditors. It can allow the bank to continue providing critical functions while restoring capital adequacy.

The basic sequence is usually:

1. shareholders absorb losses first;
2. subordinated instruments absorb losses next;
3. other eligible unsecured creditors absorb losses according to the applicable hierarchy; and
4. protected deposits and other excluded liabilities remain protected, subject to law.

Bail-in requires clear legal powers, sufficient eligible liabilities, reliable valuation and rapid execution. If investors doubt whether the instrument can be bailed in, they may withdraw funding before resolution, increasing instability. Authorities therefore need transparent rules and credible communication.

A key safeguard is the “no creditor worse off” principle. A creditor should not receive less under resolution than it would have received in the counterfactual liquidation, unless legislation provides compensation. This requires an independent valuation of the bank's assets, liabilities and liquidation outcome.

5. Crisis coordination and cross-border cooperation

5.1 Institutional architecture

A domestic crisis-management framework commonly involves the prudential supervisor, resolution authority, deposit insurer, central bank, finance ministry and sometimes a securities or insurance regulator. Their responsibilities must be legally defined before a crisis. Information-sharing arrangements should permit rapid exchange of confidential data while preserving accountability.

In a cross-border group, the home authority supervises the parent or principal entity, while host authorities supervise local subsidiaries or branches. A supervisory college supports ongoing cooperation; a resolution college focuses on resolvability, group strategy and coordination during failure. Memoranda of understanding can clarify procedures, but they do not guarantee that authorities will agree during a crisis.

5.2 Cross-border complications

Cross-border resolution faces several difficulties:

• national insolvency laws may rank creditors differently;
• deposit insurance coverage and payout rules may diverge;
• host authorities may ring-fence local assets;
• capital and liquidity may not move freely within the group;
• courts may refuse to recognise foreign resolution actions;
• data-protection and bank-secrecy rules may delay information sharing; and
• political authorities may prioritise domestic taxpayers over group-wide efficiency.

Credible cooperation therefore requires pre-agreed resolution strategies, loss-sharing arrangements where appropriate, recognition of foreign resolution measures, common data standards and joint simulation exercises. Cooperation cannot eliminate conflicts of interest, but it can make decisions faster and more predictable.

6. Future regulatory developments

6.1 Climate-related financial risk

Climate risk has both physical and transition dimensions. Physical risk arises from floods, storms, droughts, heat and other events that damage collateral, infrastructure and borrowers' cash flows. Transition risk arises from policy, technology, market or consumer changes associated with moving toward a lower-emission economy.

Supervisors increasingly expect banks to identify climate exposures, use scenario analysis, improve governance and incorporate material risks into credit, market, operational and strategic-risk frameworks. Climate scenario analysis is not a forecast of one future; it examines resilience under alternative pathways. Its limitations include uncertain climate data, long time horizons, model risk and difficulty translating national scenarios into borrower-level default probabilities.

Climate-related information should support risk management rather than become a superficial disclosure exercise. Banks need sectoral exposure data, geolocation of collateral where relevant, credible transition plans and controls against misleading sustainability claims.

6.2 Operational resilience and cyber risk

Operational resilience is the ability to continue delivering important business services within an acceptable tolerance during disruption. It differs from traditional operational risk management, which often focuses on identifying causes and estimating losses. Resilience asks whether the service will continue, how quickly it can be restored and whether dependencies will fail simultaneously.

Important practices include mapping critical services, setting impact tolerances, testing severe but plausible scenarios, maintaining alternate facilities and communications, strengthening identity and access controls, and managing third-party and cloud concentration. Artificial intelligence may improve fraud detection, stress testing and incident triage, but it introduces model, data, explainability, cyber and accountability risks. Human oversight remains essential for high-impact decisions.

6.3 Evolving Basel implementation

Basel standards continue to influence capital, liquidity, leverage, large-exposure and supervisory frameworks. Future implementation is likely to remain concerned with the reliability and comparability of risk-weighted assets, the treatment of operational risk, output constraints, leverage backstops and the interaction between capital requirements and stress testing.

Implementation is not identical across jurisdictions. National authorities may phase in requirements, apply additional buffers or adapt rules to local banking structures. Students and practitioners should therefore distinguish an international minimum standard from the binding rule in a particular jurisdiction. Banks must monitor not only published rules but also supervisory interpretations, reporting instructions and transitional arrangements.

6.4 Digital finance and new forms of intermediation

Digital banks, payment firms, stable-value arrangements, tokenised assets and technology providers may perform bank-like functions without sharing the same legal perimeter. This creates questions about regulatory arbitrage, safeguarding of customer funds, liquidity risk, cyber dependence and access to central-bank facilities. A likely regulatory direction is greater activity-based and risk-based supervision, combined with clearer rules for outsourcing, data governance and third-party concentration.

7. Applied case: failure of Meridian International Bank

The following is an illustrative fictional case.

Background

Meridian International Bank is a large banking group operating through a parent company in Country A and subsidiaries in Countries B and C. It has a diversified retail deposit base, a large securities business and a shared cloud platform supporting payments, customer records and treasury operations. Its recovery plan identifies asset sales and emergency wholesale funding as principal options. Its living will proposes a single-point-of-entry bail-in at the parent company, with operating subsidiaries continuing to provide critical services.

Problem

A sudden cyber incident interrupts online banking and payment services. At the same time, a fall in commercial-property prices produces large expected credit losses. Uninsured corporate depositors begin transferring funds, wholesale lenders refuse to roll over maturing funding and the bank's share price falls sharply. Country C's authorities consider ring-fencing local liquidity because they fear that funds will be transferred to the parent.

Analysis

The supervisor must determine whether the shock is temporary and recoverable or whether the bank is failing or likely to fail. Management activates its recovery plan, but the emergency asset sale attracts no credible bids and wholesale funding is unavailable. The resolution authority assesses whether a bridge-bank or bail-in strategy can preserve payment services. It also reviews whether the group has enough eligible liabilities at the parent level and whether host authorities will recognise the planned action.

The deposit insurer verifies depositor data and estimates the amount of protected deposits. The central bank considers collateralised liquidity, while distinguishing temporary liquidity support from solvency support. The cyber incident requires simultaneous coordination with technology providers, law-enforcement agencies and payment-system operators.

Approach and solution

Authorities conclude that recovery is no longer credible but that immediate liquidation would disrupt critical payment and deposit services. They therefore:

1. place the parent into resolution;
2. write down shareholders and convert eligible parent-level debt into new equity;
3. transfer critical subsidiaries and essential services into a controlled structure;
4. maintain insured deposits and uninterrupted payment access;
5. provide temporary liquidity against eligible collateral;
6. impose controls to prevent value leakage and ring-fencing; and
7. publish coordinated communications explaining which services remain available and how creditors are treated.

An independent valuation is commissioned to apply the no-creditor-worse-off safeguard. Non-critical securities activities are later sold, while impaired property exposures are transferred to an asset-management vehicle.

Outcome

Retail depositors retain access to protected funds and critical payment services continue. Shareholders are wiped out, while eligible parent creditors experience conversion losses. The group becomes smaller and less complex. The post-event review identifies weaknesses in cyber recovery testing, shared-service documentation, host-authority assurance and the speed of depositor-data production.

Learning points

The case demonstrates that capital, liquidity, operational resilience and legal structure are interconnected. A recovery plan is not sufficient if its options cannot be executed in stressed markets. A living will must be supported by separable systems, adequate loss-absorbing capacity and cross-border recognition. Finally, crisis communication and depositor data are operational capabilities, not merely administrative matters.

8. Governance, ethics and professional practice

Resolution decisions distribute losses among people and institutions. They therefore require more than technical compliance. Authorities and bank boards should apply legality, proportionality, transparency and accountability. Management remuneration and risk culture should not reward short-term expansion while transferring long-term losses to deposit insurers or the public.

Professionals must protect confidential information while ensuring that relevant authorities receive timely data. They must also avoid misleading disclosures about capital strength, recovery options, climate resilience or operational readiness. Independent challenge from risk, audit and board committees is essential. Scenario exercises should include inconvenient outcomes rather than being designed merely to demonstrate preparedness.

9. Best-practice framework

A bank seeking to improve recovery and resolvability should:

• maintain accurate legal-entity, liability and depositor data;
• connect recovery indicators to tested management actions;
• identify critical functions and their operational dependencies;
• maintain adequate loss-absorbing and recapitalisation capacity;
• test payment, liquidity, cyber and communications arrangements together;
• document intra-group services and develop separable alternatives;
• engage host authorities and deposit insurers before stress occurs;
• incorporate climate, technology and third-party risks into scenario analysis;
• review the living will after major acquisitions, restructurings or technology changes; and
• record lessons from exercises, near misses and actual incidents.

Chapter Summary

Bank recovery and resolution frameworks seek to manage failure without disorderly contagion or unjustified public support. Deposit insurance protects eligible depositors and reduces run risk, but coverage limits, exclusions and risk-based funding are needed to control moral hazard. Recovery plans are management-led strategies for restoring a viable bank; resolution plans or living wills explain how authorities can manage failure while preserving critical functions.

Resolution tools include liquidation, sale of business, bridge banks, asset separation and bail-in. Bail-in recapitalises a failing bank by imposing losses on shareholders and eligible creditors, subject to legal hierarchy and safeguards such as the no-creditor-worse-off principle. Resolvability depends on capital, legal structure, operational continuity, reliable data, liquidity and cross-border recognition.

Cross-border crises require cooperation among supervisors, resolution authorities, deposit insurers, central banks and finance ministries, although divergent laws and national interests remain obstacles. Future regulation will increasingly address climate-related financial risk, cyber and third-party dependencies, operational resilience, digital finance, artificial intelligence and continuing Basel implementation. Effective compliance is therefore a continuing organisational capability rather than a document prepared only for regulatory inspection.

Key Terms

Deposit insurance: A scheme that compensates eligible depositors when a member bank fails, subject to defined limits.

Moral hazard: The tendency to take greater risks when another party bears part of the potential loss.

Recovery plan: A bank-prepared plan for restoring viability during severe stress.

Recovery option: An action, such as capital raising or asset sale, intended to restore a bank's financial position.

Resolution: The orderly management of a failing or likely-to-fail bank by an authorised public authority.

Resolution authority: The statutory body empowered to apply resolution tools and manage bank failure.

Living will: A detailed plan describing how a systemically important bank could be resolved.

Resolvability: The extent to which a bank can fail without severe systemic disruption or extraordinary public support.

Bail-in: The write-down or conversion of eligible liabilities to absorb losses and recapitalise a failing bank.

Bailout: Financial support, often involving public resources, used to prevent or manage institutional failure.

Bridge bank: A temporary institution established to maintain critical functions while a failed bank is restructured or sold.

Asset separation: The transfer of troubled assets to a separate vehicle for management or disposal.

No-creditor-worse-off principle: A safeguard requiring creditors not to receive less in resolution than in the relevant liquidation counterfactual.

Critical function: A service whose interruption could seriously affect the financial system or the real economy.

Operational resilience: The ability to continue important services within acceptable tolerances during disruption.

Physical climate risk: Financial risk from climate-related physical events and conditions.

Transition risk: Financial risk arising from changes associated with the transition to a lower-emission economy.

Supervisory college: A cooperation structure through which authorities coordinate supervision of a cross-border banking group.

Loss-absorbing capacity: Capital and eligible liabilities available to absorb losses and recapitalise a bank.

Review Questions

5 Short Answer Questions

1. What are the two principal economic objectives of deposit insurance?
2. Distinguish a recovery plan from a resolution plan.
3. What is meant by bail-in?
4. State two operational requirements for an effective living will.
5. Why can cross-border bank resolution be difficult?

5 Long Answer Questions

1. Explain the principal design choices in a deposit-insurance scheme and evaluate their effects on moral hazard and market discipline.
2. Describe the main resolution strategies and identify circumstances in which each may be appropriate.
3. Explain the no-creditor-worse-off safeguard and its importance in bail-in.
4. Discuss the relationship among capital adequacy, liquidity, operational resilience and resolvability.
5. Evaluate how climate-related financial risk and evolving Basel implementation may affect bank compliance functions.

3 Analytical / Application Questions

1. A bank has a credible capital-raising option but cannot access wholesale funding after a cyber incident. Analyse whether the situation is primarily a recovery problem, a resolution problem or both. Explain the information that authorities would require.
2. Design a high-level cross-border crisis-coordination plan for a banking group with subsidiaries in three jurisdictions. Identify likely legal and political obstacles and propose safeguards.
3. A resolution authority proposes bail-in at the parent company while host authorities demand that local subsidiaries be ring-fenced. Evaluate the advantages and risks of each position and recommend a coordinated approach.

Multiple Choice Questions with Answers

Question 1

Which statement best distinguishes recovery from resolution?

A. Recovery is imposed by courts, while resolution is always voluntary.

B. Recovery seeks to restore a viable bank, while resolution manages failure or likely failure.

C. Recovery applies only to depositors, while resolution applies only to shareholders.

D. Recovery uses public funds, while resolution never uses legal powers.

Correct Answer: B. Recovery seeks to restore a viable bank, while resolution manages failure or likely failure.

Question 2

What is a principal purpose of deposit insurance?

A. To guarantee shareholders a return

B. To eliminate all bank credit risk

C. To reduce destabilising withdrawals and protect eligible depositors

D. To ensure that every bank creditor is repaid in full

Correct Answer: C. To reduce destabilising withdrawals and protect eligible depositors

Question 3

Which party normally prepares a bank's recovery plan?

A. Bank management, subject to supervisory review

B. Only the deposit insurer

C. The bank's external auditors alone

D. A foreign host authority without bank input

Correct Answer: A. Bank management, subject to supervisory review

Question 4

What does bail-in primarily do?

A. Transfers all losses to taxpayers

B. Converts or writes down eligible liabilities to recapitalise a failing bank

C. Guarantees all unsecured creditors

D. Prevents a bank from continuing critical functions

Correct Answer: B. Converts or writes down eligible liabilities to recapitalise a failing bank

Question 5

Which feature most directly supports resolvability?

A. Undocumented dependence on an affiliate for payment services

B. Accurate legal-entity and liability data

C. Unlimited deposit guarantees

D. A strategy based only on emergency asset sales

Correct Answer: B. Accurate legal-entity and liability data

Question 6

The no-creditor-worse-off principle compares a creditor's resolution outcome with what counterfactual?

A. A profitable merger

B. A government bailout

C. The relevant liquidation outcome

D. The bank's original business plan

Correct Answer: C. The relevant liquidation outcome

Question 7

Which is an example of physical climate risk?

A. A new carbon-pricing policy

B. A change in consumer preference for low-emission products

C. A flood damaging mortgaged property

D. A regulatory change in disclosure standards

Correct Answer: C. A flood damaging mortgaged property

Question 8

Operational resilience primarily asks whether a bank can do what during disruption?

A. Avoid all operational incidents

B. Continue important services within acceptable tolerances

C. Increase profits immediately

D. Transfer every service to a third party

Correct Answer: B. Continue important services within acceptable tolerances

Question 9

Why are depositor records important during bank resolution?

A. They determine the bank's stock-market valuation only.

B. They allow rapid identification and payout or transfer of protected deposits.

C. They eliminate the need for a resolution authority.

D. They guarantee uninsured creditors full recovery.

Correct Answer: B. They allow rapid identification and payout or transfer of protected deposits.

Question 10

Which institution commonly participates in cross-border crisis coordination?

A. Only the bank's marketing department

B. Supervisors, resolution authorities, deposit insurers and central banks

C. Only foreign shareholders

D. Only the bank's external software vendor

Correct Answer: B. Supervisors, resolution authorities, deposit insurers and central banks