Much progress has been made in making the U.S. financial system safer and less prone to 2/3  BIS central bankers' speeches  panics. Still, there is more to do before we can say that we have ended “too big to fail.” This is work that we absolutely must complete. In particular, U.S. bank holding companies must do more to make their organizations resolvable under either Title I bankruptcy or Title II resolution. This requires having clean parent holding company structures, less corporate complexity, and essential service and support operations that are able to continue to operate even when the parent company becomes non-viable. Also, while there has been significant progress in terms of developing a workable resolution regime—the Single Point of Entry regime established under Title II of the Dodd-Frank Act—we still have to ensure that this regime can be safely utilized on a cross-border basis. This requires fully implementing the TLAC framework, and defining more explicitly the expectations and responsibilities of the different supervisory and regulatory oversight bodies that would have to work together internationally. In particular, this includes how liquidity would be provided to an insolvent firm during the early stages of resolution, so that the firm’s operations could be wound down in an orderly way without destabilizing the global financial system. Finally, I would like to address the issue of bank culture and conduct. Although there has been considerable effort here, there is still much more to do. Banks must restore their trustworthiness.
Yet, we could make greater progress more quickly if this effort were coordinated across the industry. I think bank leaders could benefit from sharing best practices and participating in surveys that would allow them to benchmark their strengths and weaknesses versus others on an ongoing basis. Building a financial system that is more resilient and robust, having a bank resolution regime that credibly ends “too big to fail,” and building strong cultures that restore the trustworthiness of the financial industry are all goals we must continue to pursue. Without success on all three fronts, I don’t think we can say that we have fully addressed the problems made evident by the financial crisis. Thank you for your kind attention. 3/3  BIS central bankers' speeches