BIS central bankers’ speeches  3  than we were in 2008. Internationally, we have agreement on key minimum standards for dealing with large globally systemic banks. But the hard work of implementing the new powers, policies and standards is just beginning. Banks have to make the transition to the new world. This will require sustained effort on the part of the regulatory and of the political authorities. It will not be costless. And as the costs of ensuring orderly failure of large banks in bad times will fall on those banks in normal times, there will be pressure to skimp on what is necessary. I want next to review briefly the progress we have made on the five main planks of this programme of work. (i) Improved resilience The first plank is to keep banks out of trouble in the first place. This means ensuring that banks have sufficient resilience as going concerns to absorb losses without getting into trouble or having to cut back lending to the economy in times of stress. For the larger, systemic banks, it means having even higher resilience, not so much because of the extra risks they run but because of the greater damage they can do to the economy if they go wrong. I do not want to go into great detail on this today, but some headline numbers are worth highlighting.
This is not just a case of making sure that those that buy bank debt that can be bailed in realise the risks of the instruments they have purchased. It also means making sure that creditors understand the resolution strategy of the institution to which they have lent money. Unprotected depositors in institutions that have no bail-in debt should be clear that in the event of trouble, they stand next in line after shareholders when it comes to absorbing losses. Conclusion As I’ve tried to show, the question of how to deal with failing banks and who pays is not new. But the answers have changed over time. We no longer think we should rely on a diet of bread and water, unlimited liability, Shakespearian recitals, ordinary depositors or the taxpayer to bear the burden of failed banks. Our success can never be absolute. We can’t expect to insulate fully all institutions from all external shocks, however large.14 We have, however, in my view, put in place the legal, financial and practical arrangements to resolve banks of all sizes. But it will only be true if we implement the new regime on resolution fully. Both regulators and industry have an incentive to do so. If, next time there is a crisis, authorities face the same unenviable choice as in the crisis, if taxpayer bailouts cannot be avoided, then the case for breaking up banks and making them much, much simpler will be very hard to resist.