BoE Deputy Says Big Banks Still Too Big To Fail

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

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.