Options under consideration include strengthening the resilience of the institution through higher prudential requirements, contingent capital, or limitations on higher risk activities, and policies that lessen the impact of failure and the associated contagion risks through constraints on size and/or connectedness.
The second approach is to improve the capability of the financial system to deal with failure, through ex ante contingency planning to develop individual de-risking, and through further steps to improve national and international crisis resolution frameworks. The third approach is to strengthen the core financial infrastructure to withstand failure, including through arrangements for central counterparties, OTC contract design and collateralization practices.