That discussion is intended to be on a firm-by-firm basis among the supervisors and resolution authorities in the principal locations of the firm's activities. The CBRG recommendations provide useful building blocks toward a stronger crossjurisdiction national process: resolution tools, national coordination across jurisdictions, recovery planning, setting aside of impediments to recovery and resolution and simplification of organizational complexity. The CBRG also recommends that national authorities seek international convergence of resolution tools and measures. How might we envision an effective cross-border resolution process developing from these building blocks? The report is very careful in talking about how the building blocks might integrate at the international level, noting the many problems and conflicts faced by national authorities in dealing with a troubled or insolvent organization located partially outside national borders. So let me extrapolate from the report, expressing strictly my own views and sketch out how the process set in train by the CBRG recommendations might evolve. Let’s focus on a single systemically important financial institution. The healthy dialogue among regulators and resolution authorities in the principal jurisdictions for a given firm and the firm-specific recovery and resolution plans developed could provide the basis for strong cooperation when the institution crosses from healthy to troubled. On the basis of that cooperation, the lead supervisor, with the participation of the resolution authority in the home country jurisdiction, could coordinate a program of early supervisory intervention encouraging a private restructuring utilizing the recovery plan.

BIS central bankers’ speeches  1  •  If the sector continues to grow twice as fast as the economy over the next five years – not easy but we aim to – financial services will make up 14% of the economy in 2020, compared to 11% in 2010. Now, the bad news. The financial sector is inherently vulnerable to risk and volatility. •  As crisis after crisis has shown, problems in the financial sector quickly become problems for the entire economy. •  The Global Financial Crisis imposed a tremendous cost with the global economy estimated to have lost 5 percentage points of growth between 2007 and 2009, not to mention the human dimension in jobs lost and companies closed. •  As an international financial centre – connected to the global network of financial flows and playing host to hundreds of foreign financial institutions – Singapore is particularly vulnerable to contagion and shocks from abroad. The global financial industry is facing unprecedented headwinds. •  We are looking at a prolonged period of low growth and low interest rates – a combination that spells reduced earnings and increased risks for most financial institutions. •  The regulatory and compliance burden has increased significantly, following wideranging regulatory reforms in the wake of the global financial crisis. •  The reforms were necessary to help make global finance safer; but their cumulative effects do pose a challenge for the profitability of financial institutions, especially banks. •  Unprofitable banks are not necessarily safe banks.