This includes raising the quantity and quality of minimum capital buffers held by banks, and improving the resilience of banks to liquidity shocks. It includes measures to make banks easier to restructure and unwind should they become insolvent. Financial regulators are also working on designing a “macro-prudential” architecture for bank regulation.
This essentially means taking into account the impact of individual banks on the riskiness of the financial system as a whole. For example, a large systemically important bank needs larger capital buffers than a smaller player. Similarly, larger buffers may need to be built up in boom times, when banks are more vulnerable to a systemic downturn.