Uncertainty about how the FDIC would apply the Orderly Liquidation Authority weakens the viability of post-crisis reform. The FDIC should build on its recent “Single Point of Entry Notice” by clarifying a “preferred path” for Title II resolutions.
Financial market infrastructures are hubs that enable the global flow of capital. Maintaining their continuity in the face of a G-SIB’s failure is critical to sustaining economic stability. New rules promise to make FMIs more resilient while minimizing the chances that they could become propagators of financial stress.