One of the most important issues in the regulatory reform debate is that of systemically important financial institutions. This paper proposes a framework for identifying and supervising such institutions; the framework is designed to remove the advantages they derive from becoming systemically important and to give them more time-consistent incentives. It defines the four C’s of systemic importance (contagion, concentration, correlation, and conditions) as criteria for classifying firms as systemically important that goes beyond binary classification based on size alone (the classic doctrine of too big to let fail); it also discusses the concept of progressive systemic mitigation.