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

the points raised by central bank and authorised it to borrow abroad in the name of the treasury in order to strengthen its foreign reserve substantially, while the government was also mandated by parliament to strengthen the bank ’ s capital position. the board of governors would like to thank the government for such a good, firm response. the foreign loan that the central bank was authorised to take was its largest on behalf of the treasury so far. it can only be said that this was a highly successful measure – in fact, a respected international financial journal ranked it one of the ten most successful international bond issues worldwide last year. the borrowing terms were very favourable and of course reflected the confidence enjoyed by the republic of iceland in the market. the central bank ’ s greatly enhanced capital position and stronger foreign reserves do not signal any shift in its policy, but represent a natural response to changes in the environment in which the bank operates. at last year ’ s annual meeting we all had serious concerns about the peculiar discussion and sometimes unfounded speculation aired then about the icelandic banks, their position and strength. there is no doubt that this debate and the ensuing events made conditions tighter for the banks for a while. the banks responded firmly to the uncomfortable position that had arisen. they made great efforts to explain the structure and organisation of the icelandic banks. this was no half - hearted measure, but a steadfast and confident approach which produced results. the banks adjusted certain aspects of their operations and operating environment in response to relevant criticisms, and dismissed what was less relevant with explanations, reports and candid communication, at large meetings, small meetings and man - to - man, depending upon which was most productive. they needed temporarily to look beyond their traditional markets for funding, and unquestionably these conditions put their resources and management under strain. it can definitely be said that those involved passed this difficult test. the funding problem that loomed around this time a year ago is a thing of the past, terms in the secondary market have been normalised and market confidence has been restored. this is to be welcomed. what remains, however, is of course that people are now more aware of the widespread risks that the future may hold in store. global market conditions can change suddenly. credit access, which in recent times has been exceptionally favourable for icelandic and other banks, may change suddenly if unexpected conditions arise. it is important to be prepared for such a contingency. at the height of this furore, i would venture to say that the