“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.

The bank resolution mechanism clearly needs overhauling before the next round of financial turmoil.

The digitised speed of the run on Silicon Valley Bank exposed deep problems with other emergency measures, such as deposit insurance and central bank funding. Days later, Keller-Sutter and colleagues were able to push Credit Suisse into the arms of UBS. In the process, though, they wiped out the contingent convertible bonds that were supposed to rank above equity in the established hierarchy of liabilities. The “coco”, an important new tool in the post-2008 regulatory box, was shown to be unfit for purpose — or at least prone to the regulator’s whim.