Banks still “too big to fail”
The Bank of England’s deputy governor, financial stability, has warned that the issue of banks that are “too big to fail” has not been solved, despite the progress that has been made by international standard setters since 2008.
Speaking at a Chatham House conference, Jon Cunliffe noted that progress on the ambitious regulatory reform programme launched by the G20 in 2008 and 2009 has been impressive, particularly on international capital and liquidity standards for banks.
However, he added: “It is crucial that the European Parliament now gives its final approval to the proposed resolution directive. And that the directive and the new ‘bail in’ rules form the bedrock of the new Single Resolution Mechanism for the Banking Union in the Euro Area.”
So, further steps are needed to ensure major international banks can be safely resolved – Mr Cunliffe underlined: “I do not think we can say with confidence now that we could resolve a failing global giant”.