Five years on from the start of the financial crisis there are still banks that are “too big to fail” and governments around the world must do more to reform the financial system, a top Bank of England official warned on Monday.
Deputy governor Jon Cunliffe said there had been progress on a reform programme launched by the G20 group of countries at summits in 2008 and 2009 but the issue remained of banks that are deemed too large and international to be allowed to fail and so require publicly funded bailouts.
Cunliffe, responsible for financial stability at the Bank, said that getting agreement on international standards to end ‘Too Big to Fail’ was “perhaps the most important regulatory priority for the G20 summit in Brisbane in November this year.”
“I do not think we can say with confidence now that we could resolve a failing global giant,” he told a conference at London’s Chatham House.
Ending ‘too big to fail’ may well be the litmus by which the public judges the success of the entire reform programme, he added.
“Nothing has so incensed public opinion and damaged societal support for the financial sector than the apparent ‘heads I win, tails you lose’ experience of private profits and pay when things went well and public losses they did not. We will not fully restore public confidence until we can show that we can resolve failing banks – no matter how large – without public support,” he said.
via The Guardian
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