The substantial number of bilateral investment  BIS Review 47/2005  1  treaties and the liberalisation of capital accounts have further encouraged cross-border investment.1 While in the 1970s over 80% of all countries restricted access to foreign capital, today only 60% of developing countries and no industrialised countries have capital accounts which are still more or less closed.2 In the 1970s, worldwide cross-border holdings of assets amounted to only one tenth of world GDP.
To strengthen the liability principle, it is crucial, too, that a bank which, for instance, does not have a sustainable business model be able to exit the market without putting financial stability at risk. Otherwise, competition in the banking sector will be undermined.