The concept of banks being too big to fail is a concept that should be left in the past, according to the Bank of England's June 2009 Financial Stability Report. The report is published with regularity and offers guidance on how to stabilize most areas of the economy, though of late the subject matter is typically filled with bank and mortgage information. In the June submission, the government takes bank strategy to task: "The financial system should be capable of absorbing shocks from the economy and from financial markets rather than generating them. It also needs to be much better able to support economic activity on a sustainable basis, without relying on large-scale publicly funded support to weather shocks," it reads. The report suggests banks run entirely transparent and make fund movements public, especially in the areas of fair-value reporting of assets, in order to insure that direct regulation would not be a necessity in the future. However, the report also recommends the adoption of the revision to Basel II accounting regulations, a system likely to be adopted in the Unites States. The Basel Committee recently proposed revisions to existing Pillar 3 requirements to focus on the following six areas: securitization exposures in the trading book; sponsorship of off balance sheet vehicles; the Internal Assessment Approach for securitizations and other asset-backed commercial paper liquidity facilities; resecuritization exposures; valuation with regard to securitization exposures; and pipeline and warehousing risks with regard to securitization exposures. In regards to the big banks, though, the report is clear that the government takes the view that a credible threat of bank closure is inherently more difficult to deal with fo firms which are large, complex, or which have international reach. "There is also an open question in the United Kingdom about whether a different (from the normal corporate insolvency) regime is needed for non-depository institutions to ensure the continuous provision of economically significant services. For example, [the Treasury] is currently consulting on developing effective resolution arrangements for investment banks," says the report. "There may also be a case for a special regime for market infrastructures that could pose a threat to stability." Write to Jacob Gaffney.