The financial crisis of 2008 and the perception that certain firms were “too big to fail”(“TBTF”)—that their size, market importance and interconnectedness were of such magnitude that their failure under ordinary insolvency law would jeopardize the functioning of the financial markets—led financial regulators and market participants to focus on developing new approaches to the resolution of systemically important financial institutions (“SIFIs”) that did not rely on government bailouts. 1 These approaches have focused on ensuring the continuity of vital financial services, supporting global financial stability and preventing the costs of failures from being passed on to taxpayers. A key challenge in developing effective resolution strategies for SIFIs has been limiting the circumstances under which non-defaulting parties to over-the-counter swaps may exercise contractual early termination rights arising from a SIFI’s financial distress or entry into resolution proceedings, which rights may arise due to a default of the direct counterparty of the non-defaulting party (referred to in this article as a “direct default”) or as a result of the default of an affiliate of the direct counterparty (referred to in this article as a “cross default”).