This initiative of the private sector sets out the terms under which the 18 largest dealer banks, which represent 90% of derivative activity, would stay cross-border derivative contracts temporarily when a global bank fails. This is a fundamental step to closing off the risk that foreign counterparties take their money and run. By agreeing to a short stay, cross border resolution becomes much more realistic and achievable. Once this agreement is concluded, other market participants must be brought onto similar terms to those of the 18 big dealers, and FSB members must deliver on their commitments to establish regulatory requirements for contractual stays. There is more to do. Resolution plans must be finalised; we must systematically remove remaining legal and operational impediments to resolvability, we must think through mechanisms to ensure firms have adequate funding in resolution, and we must ensure resolution regimes for systemic non-banks are as effective as they are for banks But make no mistake. Brisbane will be the watershed in our collective effort to end Too Big to Fail. 2  BIS central bankers’ speeches  Building an open, global financial system Fixing the fault lines behind the last crisis isn’t enough. The second objective of the G20’s efforts is to rebuild trust in an open, global financial system. Trust between financial institutions. Trust between regulators. Trust between industry and finance. And most fundamentally, trust between the public and the financial system. That trust is essential to maintaining a truly global financial system that integrates all major economies.

Only that system can serve all economies. Only that system can support the investment and trade necessary for strong, sustainable and balanced growth in advanced and emerging economies alike. Trust can only be restored if completing one job isn’t equated with downing tools. Policymakers must now begin to look beyond how they will reform the core of the system to how they will regulate and supervise it. That approach has three elements. First, intensive co-operation. That is essential if national authorities are to continue to resist temptations to safeguard markets unilaterally through ring-fencing, compulsory subsidiarisation or extra-territorial application of domestic rules. Of course, national authorities need some scope to develop measures tailored to their own jurisdictions. Circumstances sometimes differ across jurisdictions, whether because of the stage of an economy’s development, its degree of integration into the world economy, or specific features of a local legal system. But the impact of these measures must be monitored closely for spillovers to others and – where there are not detailed international standards – authorities must resolve cross-border issues by applying the principle of deferring to each other’s rules where those rules produce similar outcomes. The second involves rigorous and transparent peer review and assessment processes. That commitment is vital not just to ensuring that agreed standards are being applied consistently, but also to allow policies to be adjusted where material unintended impacts are identified. Through such work we’ve already learned about unintended consequences, and are now addressing them.