##seeable future, require regulatory coordination and supervisory cooperation before a large firm's failure becomes a real possibility. in one sense, this observation reinforces the importance of the international agenda for strengthening capital and liquidity standards. it also counsels continued attention to efforts to ensure that globally active institutions are subject to effective consolidated supervision, and that information - sharing arrangements among home and host country supervisors are well designed and implemented. to this end, the key supervisors and central banks for each of the largest global banks will begin to meet regularly to discuss crisis planning, with particular attention to contingency liquidity planning. the crisis demonstrated that issues around cross - border liquidity support are difficult. liquidity pressures may arise in unexpected places ; time for coordination will be short ; and failures in one jurisdiction likely will spread quickly to other jurisdictions. the basel committee and the committee of european banking supervisors are working on definitions of liquid assets, common stress testing metrics and structural balance sheet measures. we are actively discussing the appropriate division of responsibility between home and host authorities to provide liquidity support and the related issue of how to approach cross - border branch operations. some have called into question the traditional assumption that home country authorities will be willing and able to support all of the worldwide operations of a banking group headquartered in its jurisdiction. what approach to substitute remains unclear, however, beyond the obvious need for broad international consistency and careful calibration with other prudential requirements. one of the key issues identified by the basel committee's cross - border bank resolution group is the complexity and interconnectedness of the largest organizations. often the complexity is motivated by tax or regulatory factors, rather than a clear business purpose. given the way these firms are structured and their linkages to key systems and other institutions, resolution of such an organization will carry significant risk of spillovers to other key markets, payments systems, or systemically important institutions. the cross - border bank resolution group consequently recommended developing initiatives that would result in simpler, less connected structures. living wills and improved management information systems this point leads us to one much - discussed idea, that of firm - specific resolution plans – sometimes referred to more colorfully, though not wholly accurately, as living wills. in one variant of the idea, each internationally active bank would be required to develop, and potentially to execute, its own resolution plan – literally to plan for its own demise. such a requirement could doubtless be helpful to some degree, but it has notable limitations. most obviously,

. conclusion all the work on resolution, both domestically and internationally, is important and necessary. but we must be realistic about what it can accomplish. in light of what has happened over the past 18 months, it is imperative that governments convince markets that they can and will put large financial firms into a resolution process rather than bail out its creditors and shareholders. yet no one can guarantee that future resolutions of systemically important firms will proceed smoothly or predictably. resolution mechanisms must be understood not as silver bullets, but as critical pieces of a broader agenda directed at the too - big - to - fail problem. measures such as strengthening capital standards and bringing all systemically important firms within the perimeter of regulation are other essential elements of that agenda.