But we do also need to consider whether there might be costs to such an approach. For those policy issues to reach closure, we need to know the way forward on resolution. (ii)  Pure universalism  What of the other end of the spectrum? In principle, an alternative approach would be to shift to a more universal approach. A pure form of universalism would rule out separate resolution or insolvency proceedings, ring-fencing and, therefore, a race for assets. It might encourage  2  Basel committee on Banking Supervision (1992). “The insolvency liquidation of a multinational bank”, Bank for International Settlements. Its key conclusions were: (1) when closing a multinational bank, supervisors should pay attention to the nature and timing of communications among themselves and of their communications with creditors, shareholders and management; (2) the nature of liquidation rules may be relevant to the manner in which multinational banks are supervised; (3) differences in liquidation rules across jurisdictions in a windingup can affect returns to depositors and other creditors and the operations of deposit protection schemes; and (4) coordination and cooperation between liquidators can affect the returns to creditors in a liquidation and can be affected by the role of supervisors in a liquidation. 3  See the Bank’s recently published paper: “The role of macroprudential policy: A discussion paper” and Tucker P M W (2009e), “The debate on financial system resilience: Macroprudential instruments” at the Barclays Annual Lecture in London. 4  BIS Review 33/2010  a more cooperative approach to cross-border resolution.

But was the Concordat based on a false premiss: that the division of supervisory-labour during peacetime can carry smoothly over to the only period that really matters, distress? Because, as it happens, neither standard resolution regimes for commercial banks nor any super-SRR of the kind I have just outlined for going-concern restructurings could be applied easily to the cross-border activities of LCFIs. SRR tools cannot automatically be applied extraterritorially. It seems to me that policymakers need to face up to, and decide whether or not to fix, the really big issues about how insolvency and resolution laws are applied to internationally active financial companies. BIS Review 33/2010  3  Broadly speaking, countries’ laws apply either territorial principles to international insolvencies, consistent with separate procedures for each of a bank’s entities in different jurisdictions (so-called “separate-entity resolution”); or universal principles, consistent with a single procedure applying to the resolution of an international bank and its branches abroad, wherever they are located (“single-entity resolution”). I believe that top-level policymakers have to choose what kind of regime they want. This issue needs to be elevated above the level of middle-ranking technocrats where, through no great fault of their own, it has wallowed for too long. The issues were articulated as long as 20 years ago, following BCCI’s failure. 2 Nothing much has been done globally. So in the second half of my remarks today, I just want to sketch why this problem arises.