During the financial crisis governments provided taxpayer support for banks, steadying the global financial system and helping to avoid a repeat of the Depression. Those bank rescues exposed governments and taxpayers to losses. And in the long term they will have made banking riskier if managers and creditors conclude that bailout is part of the fabric of the system.

To avoid that fate, the “too big to fail” problem must be cured. We believe it can be and that serious progress is being made. Evidence can be seen in the joint paper released by our organisations today, which outlines a resolution strategy for large and complex financial companies.

Alongside higher capital and liquidity requirements, the best chance of a durable solution will come from a process for resolving the largest international banks – so-called global systemically important financial institutions (GSifis) – in an orderly way when they fail. The failures of GSifis that confronted the US and UK in 2008 were unprecedented in scale, complexity and interconnectedness. They also outstripped the capabilities of the legal frameworks in place.