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Rethinking Global Economic Governance in Light of the CrisisSupervision, the Financial Stability Board, the IMF, and others) to strengthen regulatoryand supervisory frameworks, improve the robustness of these institutions, and enhanceactual supervision internationally to prevent distress. At the same time, any approachhas to be based on clear analysis of the underlying problem and not on wishful think(er)ing. Logic suggests starting from the endgame, ie, resolution – the process of how aweak financial institution is (in part) liquidated, closed, broken up, sold, or recapitalised.Specifically, the rules governing who is in charge of the restructuring and liquidationprocess and how losses are allocated when a G-SIFI runs into trouble are crucial. Theendgame strongly affects supervisory incentives and market behaviour long beforedifficulties arise. And the endgame rules affect the time-consistency problem, whetheror not an ad hoc bailout is, ex post, the most efficient solution.As policymakers realise all too well, however, especially in Europe today, approachesto the resolution of G-SIFIs can conflict with three other policy objectives – preservingnational autonomy, fostering cross-border banking and maintaining global financialstability. These three objectives are not always mutually consistent; they create afinancial trilemma, and approaches to resolution have to operate within this trilemma.In this paper, I examine the causes for the resolution problem of G-SIFIs and reviewthree approaches to improving cross-border resolution which address the financialtrilemma head on, acknowledging that solutions are to be found in partly giving upfiscal and legal sovereignty or putting restrictions on cross-border banking.2 Diagnosis of the current problemThe recent financial crisis has had multiple causes, with their relative importance stillbeing debated (for analyses and views, see the financial crisis issues of the Journal ofEconomic Perspectives, Winter and Fall 2010; Winter 2009). One of the (approximate)causes, however, was surely the behaviour of G-SIFIs (Claessens, Herring andSchoenmaker, 2010). In part because of weak oversight, G-SIFIs took too much risk76