Several potential regulatory devices with a more direct systemic focus have also garnered substantial interest, both here and abroad.
Prominent among them are proposals to (1) impose special taxes or capital charges on firms based on their systemic importance, (2) require systemically important firms to issue or maintain contingent capital instruments that would convert to common equity in periods of stress, and (3) reduce procyclical tendencies by establishing special capital buffers that would be built up in boom times and drawn down as conditions deteriorate.