As a key priority, it has been agreed that SIFIs should have higher loss absorbency capital beyond Basel III standards. The purpose of these requirements is threefold: first, to increase SIFIs resilience to adverse shocks; second, to internalise the costs of distress they impose on the financial system; and third, to restore proper incentives with respect to their risk-taking.
Let me also highlight that a key element of the SIFI policy framework is to develop strengthened resolution frameworks to ensure that all financial institutions can be resolved safely and quickly, without destabilising the financial system and exposing the taxpayer to the risk of loss.