The Financial Stability Board announced that there are 30 systemically important global financial institutions (SGFIs) — 24 banks and six insurance companies — that pose sufficient systemic risk to warrant additional supervision and the establishment of recovery and resolution plans ("living wills"). Global financial regulators intend to set forth an aggressive regulatory regime including wind-down provisions to create orderly dissolution of SGFIs should they fail.
This middle road may be the worst-case approach. It identifies the systemically important institutions and allows them to continue to exist. At the same time, it acknowledges that regulations cannot be successful in averting failure but can, however, avert a global financial catastrophe through an established method of wind-down.