First, each major jurisdiction must adopt a statutory resolution regime for financial firms consistent with the FSB’s Key Attributes.1 The United States has been a leader in this regard, and I hope that other countries that have not yet adopted a compliant resolution regime will do so promptly.
Second, policymakers need to ensure that all SIFIs maintain a sufficient amount of total prefailure and post-failure loss absorption capacity. In consultation with the Federal Deposit Insurance Corporation, the Federal Reserve is considering the merits of a regulatory requirement that the largest, most complex U.S. banking firms maintain a minimum amount of long-term unsecured debt outstanding.