Treasury has published a discussion paper on possible options for reducing the cost of financial sector failures to the taxpayer. The document looks at the role and risks of the financial sector and ways of reducing risks. It turns to ways to reduce the burden of financial sector failures on society and specifically how to redress the balance of bearing costs and benefits of the sector. The paper says there is a case for increasing the costs of risk-taking to banks and their shareholders but also allowing them to contribute effectively to economic growth. Any solution cannot be a one-size-fits-all model because different institutions pose different types and levels of risk to the system and the first response must always be to ensure losses in individual institutions are borne by shareholders and other creditors in an orderly way without triggering a systemic crisis. A credible threat of failure is also important.