WASHINGTON — Credible resolution plans for large banks, known as living wills, are key to dealing with the too-big-to-fail dilemma without relying on public financing, and as a side benefit can instruct regulators on how to better supervise these firms, Richmond Federal Reserve Bank President Jeffery Lacker said Tuesday.

There will be challenges, including how to resolve multi-national financial institutions, and increased costs, including increased capital and insisting on separate subsidiaries in each country, but those trade-offs are necessary, Lacker said in a speech prepared for delivery to the Global Society of Fellows at the University of Richmond.

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