data from a study carried out in 2010. 3 68 % of their subsidiaries are located abroad, and they generate 56 % of their pre - tax earnings from cross - border operations. in the past, if institutions like these became distressed, national supervisors regularly ring - fenced their assets. the banking groups were broken up according to national boundaries or were rescued by the respective home states as separate national entities. this meant systemic distortions and considerable cost for the taxpayer. mervyn king once summed this up succinctly with the words : “ global banking institutions are global in life but national in death ”. 4 we may not have alexander the great ’ s sword, but there are two magic words which will help deal with these challenges. these words are “ cooperation ” and “ planning ”. in order to systematically enhance cooperation between home and host countries, thereby improving crisis prevention, the key attributes contain a wide range of requirements which seek to promote cooperation. first, the competent authorities of the home jurisdictions of a sifi are required to conclude institution - specific cooperation agreements with their counterparts in the respective key host countries. second, crisis management groups are to be set up for each sifi ; within these groups, all responsible national bodies5 will come together at regular intervals to discuss crisis planning and crisis management. third, in order to lay the necessary foundations for this, all impediments to sharing confidential information must be removed. i consider this last point to be especially important! we have known for years now that the exchange of information between supervisory authorities is hampered by the lack of or an inadequate legal basis. incidentally, this particular impediment not only obstructs resolution regimes but also affects many different areas of the g20 financial sector reform agenda. the necessary legislative changes will have to be made when the requirements resulting from the key attributes are transposed into european and, later, german law such as the german banking act. the european commission is already aware of this problem. 2. 4 recovery and resolution planning recovery and resolution planning will facilitate cooperation between the authorities. this planning process consists of three mutually dependent components. first, the responsible authorities agree on an assessment on the banking group ’ s resolvability, the aim being to examine the practicability and credibility of a resolution strategy. any impediments to resolution should be identified and removed. in november of last year, the g20 committed themselves to carry out such assessments for all global systemically important banks by

##everaging process could have a negative impact on the credit supply within the euro area and pose a potential danger to economic development throughout europe and beyond. the imf ’ s estimate needs to be evaluated in finer detail. nevertheless, it does illustrate the sheer scale of the problem. the point is, not least, that it must be possible in a market economy for financial institutions to withdraw from competition for economic reasons without casting the financial system into turmoil. this underlines how important it is to find a sound preventive solution for dealing with big banks. what does the g20 ’ s solution proposal entail? the new sifi rules are built on two pillars. first, the likelihood of a sifi failing has to be reduced, meaning that sifis are to be more resilient, mainly through specific capital surcharges that go beyond the requirements of european commission, framework for crisis management in the financial sector, 10 january 2011 ; http : / / europa. eu / legislation _ summaries / internal _ market / single _ market _ services / financial _ services _ banking / mi 0062 _ en. htm. imf, global financial stability report – the quest for lasting stability, april 2012. bis central bankers ’ speeches basel iii. second, the restructuring or resolution of a sifi is to be made possible in future without jeopardising financial stability and without having to resort to taxpayers ’ money. 2. a new international standard for resolution regimes 2. 1 basics of the fsb key attributes of effective resolution regimes for financial institutions for this purpose, the financial stability board, fsb for short, has developed, and the g20 have adopted, a new international standard for resolution regimes : the “ key attributes of effective resolution regimes for financial institutions ” – which i will refer to as the “ key attributes ” from now on. this is the first time that the main features that national resolution regimes should include have been stipulated at the global level. for example, in future each of the g20 jurisdictions will have to set up a designated resolution authority for financial institutions. moreover, specific requirements fostering cooperation between national authorities will promote crisis prevention and crisis management. finally, institutions and supervisors alike will have to become very concrete in their planning of possible responses to an upcoming crisis. i will discuss these points in more detail later. these key attributes were urgently needed, even if some financial sector commentators would have preferred a globally uniform insolvency law. it goes without