- specific cross - border cooperation agreements ( or coags ) are also bis central bankers ’ speeches being developed, setting out roles and responsibilities of the home and host authorities, clarifying how they will share information, and how they will cooperate to implement their preferred resolution strategy. if home and host authorities are not going to cooperate, we need to flush that out ahead of time, rather than stumble into it in the moment of desperation. there ’ s a good deal of cultural change entailed here. in the past, supervisors have sometimes seemed during peacetime to be more committed to cooperating than they have been prepared to live up to when it most mattered. a forthcoming fsb consultation paper on developing resolution strategies but we – the fsb – realise that more guidance is needed. although not of central interest to this audience, resolution isn ’ t just about banks, and so we are planning to elaborate on how the key attributes should be applied to, for example, central counterparties, insurers, and the client assets held by prime brokers, custodians and others. more relevant to today ’ s conference, following the fsb ’ s recent plenary meeting in tokyo we announced that in the next few weeks we will issue a consultative paper on resolution planning and, in particular, on resolution strategies. the paper, drawn up by a subcommittee led by christine cumming of the new york federal reserve bank, will cover three areas. the first is recovery triggers and stress scenarios used in recovery planning. firms need to ensure that triggers are not linked mechanically to metrics that lag behind their true financial condition – a problem with some previous earlyintervention frameworks. recovery actions must start sufficiently early. but care must be taken to avoid markets overacting to the fact of such actions being taken. that is not easy. second, the consultative paper will outline a possible framework for national authorities to use when identifying the critical functions and support services of firms that need to be sustained in distressed conditions. what matters here is focusing on those services that are vital to the economy. the third, and most important, area of consultation is about the development of resolution strategies and operational resolution plans. this guidance aims to capture the main issues that authorities should address. it draws on two stylised approaches to resolution : a so - called “ single point of entry ” approach, under which resolution of a whole group is executed, primarily by the home authority and mainly at the level of the parent

or holding company ; and, secondly, a “ multiple point of entry ” approach whereby co - ordinated actions are taken by a number authorities along national, regional or functional lines. there is, of course, a spectrum between those two poles. identifying the resolution strategy that is most likely best suited to each specific firm is very important. the strategy must be relatively easy to understand – a strategy that cannot be explained concisely to top officials in central banks and regulators is not a strategy at all. but although authorities should try to identify a preferred strategy and should be as transparent as possible, i should caution that what turns out to be the best approach in the event of distress will depend on the circumstances. the suggestion of a “ presumptive path ”, being aired by some in the market, is somewhat unrealistic, at least in its strongest form. public authorities with statutory obligations to maintain stability cannot bind themselves to detailed strategies that in the event might not work as well as an alternative. at the planning stage, whether a single - or a multiple - point - of - entry strategy looks more feasible will depend upon a group ’ s organisational and financial structure. it is likely that some groups will need to adapt themselves in order to remove impediments to resolution. much of that will be case by case. but some general policies are also emerging. here in the uk, the government is requiring the domestic retail banking business of the largest banking groups to be ring - fenced. and for the eu, erkki liikanen has produced an important report on bis central bankers ’ speeches the structure of banks which would involve essentially ring - fencing the trading business. both of these approaches, which are similar in many respects, work with the grain of the fsb ’ s approach to resolution. single - point of entry resolution : bail - in of the debt of the top company the central principle running through this whole endeavour is that after equity is exhausted, losses should fall next on uninsured debt holders, in the order they would take losses in a standard bankruptcy or liquidation process. although all resolution strategies have that effect, it is the particular focus of what has come to be called “ bail - in ”. i should perhaps say that bail - in isn ’ t about identifying a special type of bond that can be written down or converted. “ bail - in ” is a verb not a noun. it ’ s about giving the authorities the tools, the powers, to effect