There is no silver bullet or one-size-fits-all solution here. One focus of our work is therefore to provide supervisors with tools that enable them to take action in national contexts under existing authority – governance, intensity of supervision, structural simplification, capital surcharges, etc. Systemically important financial institutions have to be resilient even in periods of broad financial system stress events.
Capital, liquidity and leverage expectations should reflect that. But we will never be able to fully eliminate the potential for failures, therefore a key requirement across all jurisdictions is the establishment of effective resolution frameworks that allow all types and size of institutions to fail, and adequate co-ordination of these frameworks across borders. This is a tall order, as we all know.