Importantly, to restore a meaningful degree of market discipline and to address the too-big-to-fail problem, it is essential that there be a credible process for imposing losses on the shareholders and creditors of the firm. Any resolution costs incurred by the government should be paid through an assessment on the financial industry and not borne by the taxpayers.
Beyond strengthening and extending consolidated supervision and making provisions for the safe unwinding of failing, systemically important firms, there remains the broader objective of monitoring and addressing emerging systemic risks. Because of the size, diversity, and complexity of our financial system, that task may exceed the capacity of any individual supervisor.