...In the aftermath of the financial crisis, governments and international bodies are discussing the need for better policies to manage failing banks that threaten to trigger a systemic crisis. Their goal is to reduce the damage of such a crisis to financial systems and economies. Some governments have already adopted "resolution regimes" to allow for the orderly wind-down of a failing bank, while others are discussing various proposals for domestic and international frameworks. Common to all of them is a determination that costs to the taxpayers should be limited by ensuring that bank creditors share part of the burden. (Watch related CreditMatters TV segment titled, "Could Bank Resolution Regimes Spur Rating Actions?," dated March 23, 2011.) Despite their objectives and the potential long-term improvements to financial stability, Standard & Poor's Ratings Services believes that resolution regimes may not prevent a future banking crisis or remove the potential for systemic contagion, and...