National resolution regimes are stretched to their limits when it comes to globally operating SIFIs. To borrow the well-known line from Mervyn King, the Governor of the Bank of England: “Global banking institutions are global in life but national in death”. In the past, if internationally active banks ran into trouble, national supervisors regularly ring-fenced their assets.
Banking groups were broken up or rescued as separate entities along national boundaries. This led to systemic distortions and considerable costs to taxpayers. Against this background, the Financial Stability Board has developed, and the G20 have adopted, a new international standard for resolution regimes, known as the Key Attributes of Effective Resolution Regimes for Financial Institutions. I very much welcome this development.