By Huw Jones
LONDON, March 18 (Reuters) - Many countries have not yetintroduced laws allowing regulators to write down bank's debtsto avoid taxpayer bailouts and prevent them being "too big tofail", the world's top financial watchdog warned on Friday.
The Financial Stability Board (FSB), which can "name andshame" those which do not yet comply with its rules, said membercountries that do not yet have these laws include Argentina,Australia, Brazil, Canada, China and Chinese territory HongKong, India, Indonesia, Korea, Mexico, Russia and Saudi Arabia.
The FSB, which is chaired by Bank of England Governor MarkCarney, is tasked with coordinating financial regulation for theGroup of 20 economies (G20). Membership of the G20 includes acommitment to implement rules it has agreed.
In a review of how G20 countries have implemented rules toavoid a repeat of government bailouts of lenders as during the2007-09 financial crisis, it said few of its members haveintroduced the so-called bail-in tool.
This gives regulators powers to write down a bank's bonds totop up capital and keep core parts of a bank functioning, suchas customer deposits and payments.
"Only the European Union member states, Switzerland and theUnited States are currently able to achieve a creditor-financedresolution to support continuity of critical functions," itsaid.
The bulk of the world's 30 globally systemic banks, such asHSBC, Deutsche Bank, JPMorgan, Citi and BNP Paribas, are in these jurisdictions.
Ravi Menon, managing director of the Monetary Authority ofSingapore, who chairs an FSB committee on implementing rules,said the reforms on resolving or winding down failing banks area critical component of addressing the too-big-to-fail problem,where governments have no option but to bail them out because ofthe knock-on damage that would be caused if they did not.
"Substantial work remains to put in place a full set ofresolution powers and recovery and resolution planningrequirements," added Fernando Restoy, Deputy Governor of theBank of Spain and chair of the team who carried out the review.
The task force said countries that have not fullyimplemented the rules on dealing with failing banks should sayby December what actions they have taken or intend to take. (Reporting by Huw Jones; Editing by Alexander Smith)
HSBC Holdings (HSBA)