The modified regime should counteract the risks posed to U.S. financial stability by the activities of foreign banking organizations, as manifested in the years leading up to, and through, the financial crisis. Special attention must be paid to the risk of runs associated with significant reliance on short-term funding. In addition, the regime should reduce the difficulties in resolution of cross-border firms.
Finally, it should take steps to diminish the potential need for ex-post ring-fencing when losses mount or runs develop during a crisis, since such actions may well be unhelpfully procyclical.