With the IMF and World Bank meetings this weekend come the canapés, with everyone clutching cocktails at lovely soirees all over Washington bearing witness, yet again, to the ability of central bankers and finance ministers to party down no matter what. Much of the meetings focus on the principal duties of the Fund and Bank: currency valuation, development and the like. Still, there’s much talk of financial reform, with all for it in general even as discord grows on vital policy initiatives. As international accord falters, big U.S. financial firms face an increasingly tight vise: they could well have to hold capital and meet other standards designed to discipline all the too-big-to-fail banks in other nations even as the U.S. makes sure there aren’t any more of them here.

The array of cross-cutting regulatory proposals is turning from confusing to confounding. Case in point: resolution plans that could force banks to figure out in advance which lifelines are vital to them and then to tell regulators which to unplug when. This might make sense but for several other proposals. The loss-absorbent capital charge advancing in Basel III, not to mention “bail-in” debt and other ideas – are designed to insulate governments from the presumed inevitability of ponying up when a big bank fails in the future. So, which is it – orderly liquidation or inevitable rescue? It makes a difference. If there’s no way to save a financial system except to save its biggest banks, then banks are wards of the state and should be so treated in all of the rules attendant to them. But, what if big banks aren’t, in fact, needy relations to national governments? Then, do they need to pay for not just a belt or even a belt and suspenders, but also for suspension cables suitable for the Triboro Bridge?

If large financial firms can be shuttered through the bankruptcy-like “orderly liquidation” process mandated in Dodd-Frank, then they need not pay for the cost of a rescue they should never get. This is precisely the Dodd-Frank Act’s objective: liquidation, not resolution. And, just in case, the law makes clear that financial firms, not taxpayers, would pay for any systemic support that slips through the stringent new regime. And, just to be sure no one trips the liquidation wire, Dodd-Frank is replete with all sorts of tough new standards: a ban on proprietary trading, systemic surcharges and the like – costs so far sure to hit only U.S. firms. Charging big firms first for the government costs associated with potential bail-out and then subjecting them to the market discipline resulting from almost sure shut-down is, as we said, a vise. As things stand now, big U.S. banks will be damned on all counts, forced to pay the regulatory cost for rescues they won’t get even as profitable businesses are banned and counterparties, creditors and the market more generally hike the cost of doing business with them in expectation of show-no-mercy liquidation.