Bank of England Deputy Governor Fears the Worst is Still to Come

The “worst may still be ahead” for the banking system, the Bank of England’s deputy governor has told a gathering of leading bankers.

Paul Tucker said reserves held by banks were still not calibrated for the “end-of-the-world risks” that remained a possibility.

He added that bank bosses should be paid in debt, so they had a stake in the survival of their institutions.

Mr Tucker is a leading contender to be the Bank of England’s next governor.

Speaking at the British Bankers’ Association’s (BBA’s) annual conference in London, Mr Tucker said that the most important issue ahead was ensuring that banks could be allowed to fail in an orderly way.

This should be done without taxpayer support, he said. This would also make it easier for new, smaller entrants to the banking sector and encourage competition in a UK market dominated by a small number of institutions.

However, he also sounded a positive note for the City of London, saying that the Bank believed – if the correct structure was in place – that the financial centre would prosper in the future.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza
Alfonso Esparza

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