Safe to Fail

Reforming resolution constitutes the second, and arguably more important, pillar of the reform program initiated by the G-20 in response to the crisis. This aims to make banks resolvable, so that the failure of a bank need not disrupt financial markets or the economy at large and so that investors, not taxpayers, bear the cost of bank failures. In other words, reform aims to make banks “safe to fail.” These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.