Tucker and US plan clampdown on the 'too big to fail' banks
Tuesday 11 December 2012
Top managers would be fired, shareholders would be wiped out and bondholders could expect to lose massively in any future meltdown of a major bank, according to a UK and United States plan revealed yesterday.
Paul Tucker, deputy governor of the Bank of England, and his counterpart on regulation in America, Martin Gruenberg, chairman of the Federal Deposit Insurance Corporation, outlined the tough measures they will take if one of the top dozen banks in the UK and US were on the brink of failure.
"The 'too big to fail' problem simply must be cured," said Mr Tucker. "We believe it can be, and that this joint paper provides evidence of the serious progress being made."
Although the US and European Union are developing separate legislation to deal with major banks, the announcement makes it clear that the UK believes it must work equally closely with the US because so many of the dozen banks covered by them are big in both countries.
Of the 28 "globally active systemically important financial institutions", as they are known in the jargon, four are UK-based; HSBC, Barclays, RBS and Standard Chartered. The majority of the eight US banks, Citigroup, JPMorgan Chase, Bank of America, Bank of New York Mellon, Goldman Sachs, Morgan Stanley, State Street and Wells Fargo, also have large operations in London. That was the case when Lehman Brothers collapsed in 2008.
In their paper Mr Tucker and Mr Gruenberg state: "Culpable senior management of the parent and operating businesses would be removed, and losses would be apportioned to shareholders and unsecured creditors."
Look beyond the usual shows for the best festive telly
Geoffrey Macnab does not like the comedian's big screen debut
The battle for control of Stieg Larsson's £30m legacy
French pub fined €9,000 after customers returned empties to bar - because it's 'undeclared labour'
David Cameron takes his biggest gamble yet as he gets tough on Europe over immigration
Two PAs cleared of fraud - and Nigella Lawson left reeling at 'ridiculous sideshow' of drug allegations and public dissection of her marriage to Charles Saatchi
Burglar steals video tapes of child abuse, hands them into police
Paul Walker's daughter Meadow attends Justin Bieber Believe premiere
- 1 Tim Sherwood challenges Daniel Levy to set out vision for Tottenham Hotspur’s future
- 2 French pub fined €9,000 after customers returned empties to bar - because it's 'undeclared labour'
- 3 Sun will 'flip upside down' within weeks, says Nasa
- 4 #Teamnigella: It’s the only side to be on
- 5 Christmas comes early: Justin Bieber is 'retiring from music'
- < Previous
- Next >
iJobs Money & Business
£59999 - £80001 per annum + Benefits: Pro-Recruitment Group: A Top 10 firm in ...
£50000 - £75000 per annum + benefits + bonus: Harrington Starr: Project Manage...
£60000 - £90000 per annum + benefits + bonus: Harrington Starr: Business Analy...
£Negotiable: Citifocus: High calibre individual with institutional client serv...