There is no doubt that the risk such as system failure always exists in the financial market. An appropriate regulation and supervision can provide an objective evaluation of risk profile of an institution. After the accurate judgement, the potential risk can be monitored by relevant institutions in case that it goes out of control in the further. If a risk has been existed in the financial system already, it can be forewarned and properly resolved by the authority. Hence, the prudential and supervisory framework is beneficial to the well being of the economy.  

What is more, the failure resolution mechanisms for financial institutions that is the last defence of the financial safety net. No one can guarantee that a well managed financial organization will never suffer a collapse in the further. Consequently, the last line of a safety net which can safeguard the financial market and investors should be operated soundly. Take the UK as an example, in terms of the Banking Act 2009, the Special Resolution Regime has been set up by the UK authority. The SRR is made up of three parts which are the stabilisation options, the bank insolvency and administration procedure.