We should first cast our minds back to the global financial crisis. While the issue of “too big to fail” had occupied regulators and finance professionals for decades, it was in the 2008 crisis that the contours of the too-big-to-fail problem in a globalized world became clear.
In 2010 Mervyn King, the then Governor the Bank of England, noted that “most large complex financial institutions are global—at least in life if not in death.” In this pithy sentence, he summed up the challenge policymakers faced. Decades of bank expansion and cross-border integration had provided many economic and social benefits, such as the ability to finance global supply chains.