It comprises a number of elements, including: •  applying a “haircut” to depositors and other creditors of the failed bank at a level assessed to be sufficient to absorb likely losses;  •  giving depositors access to the non-haircut portion of their deposits within a very short period of the failure occurring, but providing a government guarantee of those deposits so as to encourage depositors to keep their funds at the bank; and  •  facilitating either the recapitalisation of the bank or some other resolution option that is consistent with maintaining a sound financial system.
The original speech, which contains various links to the documents mentioned, can be found on the US Federal Reserve System’s website. *  *  *  Last month I had the pleasure of meeting with someone very well known to this audience but not so well known to Americans generally: Dr. Muhammad Yunus.