“A globally active, systemically important bank cannot simply be wound up according to the ‘too big to fail’ plan,” Switzerland’s finance minister said last weekend. “Legally this would be possible. In practice, however, the economic damage would be considerable.”Fresh from crafting the rescue-by-takeover of Credit Suisse, Karin Keller-Sutter identified a clear problem. Bank resolution, the supposed gold standard of emergency regulatory action, cast in the heat of the great financial crisis of 2007-08, may be mainly decorative.
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