When global banks fail: “On December 10th the Bank of England (BoE) and America’s Federal Deposit Insurance Corporation (FDIC) took a step towards making it a little less daunting when they outlined plans to work together were any of their large global banks to implode. The most important element of the strategy is that big cross-border banks should be “resolved”, or cleaned up, from the top down, meaning by the authority in their home countries. A second is that these banks be forced to hold enough unsecured debt at the top of their corporate structures to allow the authorities to impose losses on bondholders, a process known as “bail-in”. The logic of both positions is compelling. In a normal bankruptcy authorities in different places try to grab assets in their own jurisdictions to pay off local creditors, often felling perfectly sound subsidiaries. That happened after the collapse of Lehman Brothers.”