This instrument will allow authorities to restructure or resolve banks without putting taxpayers’ money at stake. In the future, whenever a bank fails, resolution costs must be borne first by shareholders and creditors. After that, a bank-financed resolution fund is to come into play, and only as a last resort are public funds to be used and the taxpayers made to pay.
3  Bringing light to the shadows – the shadow banking system  We have made good progress at the global and the European level in addressing the toobig-to-fail problem. However, discussions have mainly centred around the banking system. Yet there are other parts of the financial system that might become a source of systemic risk. One of them is the shadow banking system.