has been aimed at strengthening financial markets generally, without regard to the status of relevant market actors as regulated or systemically important. the greatest focus, as mandated under titles vii and viii of dodd - frank, has been on making derivatives markets safer through requiring central clearing for derivatives that can be standardized and creating margin requirements for derivatives that continue to be written and traded outside of central clearing facilities. the relevant u. s. agencies are working with their international counterparts to produce an international arrangement that will harmonize these requirements so as to promote both global financial stability and competitive parity. in addition, eight financial market utilities engaged in important payment, clearing, and settlement activities have been designated by the financial stability oversight council as systemically important and, thus, will now be subject to enhanced supervision. as you can tell from my description, many of these reforms are still being refined or are still in the process of implementation. the rather deliberate pace – occasioned as it is by the rather the operative statutory language reads as follows : “ in order to prevent or mitigate risks to the financial stability of the united states that could arise from the material financial distress or failure, or ongoing activities, of large, interconnected financial institutions, the board of governors shall... establish prudential standards for nonbank financial companies supervised by the board of governors and bank holding companies with total consolidated assets equal to or greater than [ $ 50 billion ] that... are more stringent than the standards and requirements applicable to [ other regulated firms ] and... increase in stringency. ” bis central bankers ’ speeches complicated domestic and international decisionmaking processes – may be obscuring the significance of what will be far - reaching change in the regulation of financial firms and markets. indeed, even without full implementation of all the new regulations, the federal reserve has already used its stress - test and capital - planning exercises to prompt a doubling in the last four years of the common equity capital of the nation ’ s 18 largest bank holding companies, which hold more than 70 percent of the total assets of all u. s. bank holding companies. the weighted tier 1 common equity ratio, which compares high - quality capital to risk - weighted assets, of these 18 firms rose from 5. 6 percent at the end of 2008 to 11. 3 percent in the fourth quarter of 2012, reflecting an increase in tier 1 common equity from $ 393 billion to $ 792 billion during the same period. gaps in regulatory reform despite this considerable

they could be resolved under the bankruptcy code in an orderly fashion in the event of failure. although the bankruptcy code provides the default legal framework for the resolution of a failed bank holding company, title ii of the dodd - frank act creates a backup resolution framework, called the orderly liquidation authority, to be used if the resolution of a failed financial company under the bankruptcy code would have serious adverse effects on u. s. financial stability. if that criterion and several others are met, title ii allows the secretary of the treasury to appoint the fdic as receiver for the failed financial company as an the average ( per bank ) assets of the 465 banks resolved by the fdic between 2008 and 2012 was roughly $ 1. 5 billion, with a total of $ 680. 3 billion. the largest depository institution ever resolved by the fdic was washington mutual, which was resolved in 2008 and had total assets of $ 307 billion prior to failure. lehman ’ s pre - bankruptcy total assets were $ 691 billion. the second - largest bankruptcy in american history was the bankruptcy of washington mutual, inc., the savings and loan holding company that owned washington mutual ; its pre - failure total assets were nearly $ 328 billion. both lehman and washington mutual filed for bankruptcy in september 2008. bis central bankers ’ speeches alternative to a bankruptcy resolution overseen by a judge. the orderly liquidation authority has several features that could reduce the systemic effect of a financial company ’ s failure relative to a bankruptcy resolution, including an orderly liquidation fund to provide government liquidity support for the failed firm and provisions to prevent the unwinding of the failed firm ’ s derivatives and other qualified financial contracts while they are transferred to a solvent firm. the federal reserve board has recently proposed important new rules to increase the prospects for the orderly resolution of a gsib with minimal effect on financial stability. last october, the board proposed a rule to subject the eight u. s. gsibs to total loss - absorbing capacity ( tlac ) and long - term debt requirements, building on the international tlac standard established by the financial stability board. 3 the proposal would require these systemically important firms to maintain outstanding a large quantity of long - term debt that could be used to absorb losses and recapitalize the firm in an orderly resolution under either the bankruptcy code or the orderly liquidation authority. 4 the proposal would also apply internal tlac and long - term debt requirements to the u. s. intermediate holding companies of foreign gsibs