The efforts at the FSB have since proceeded towards addressing three specific issues: (i) reducing the probability and impact of failure via higher prudential requirements, better supervisory practices, potential limitation on the size, breadth and intra-group connectivity; (ii) improving resolution capacity; and (iii) strengthening the core financial infrastructures and markets to address interconnectedness and lessen the risk of contagion in case of resolution. 29.
The specifics of the broad template are still under preparation and it will indeed be a huge challenge for global regulators to arrive at an agreed framework. Given the heterogenous country situations in respect of banks that are not internationally active, a “constrained discretion” approach is being discussed which will help country jurisdictions to design a suitable framework for SIFIs.