We must make it possible for SIFIs to undergo an orderly exit from the market without the use of taxpayers’ money. Only credible resolution mechanisms can eliminate the market’s rescue expectations – which means that having systemic importance must not be tantamount to being “too big to fail”.
The more than 60 sometimes opposing commentaries in the FSB’s public consultation7 on this issue have been carefully reviewed. The resulting “Key Attributes of Effective Resolution Regimes for Financial Institutions” will very likely be ready for endorsement by the G20 leaders in Cannes.