Bank resolution: Pre-empting the next crisis

Posted: March 26, 2015 in economy
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The world is going to university

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Bank resolution


Regulators’ desire to make banks easy to kill is determining how they live

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JUST 51 hours separate the closing of the New York Stock Exchange on Friday afternoon from the opening of the Tokyo bourse the following Monday. How bankers wish it were longer. Regulators want it to be possible for any bank to fail without causing chaos or taking a bail-out from taxpayers. To that end, they are demanding that big financial firms draw up plans that would make it easier to dismember them or start winding them down during the brief weekly hiatus in trading.
That is proving tricky. This week the Federal Deposit Insurance Corporation (FDIC), the American regulator that takes charge of failing banks, rejected the “living wills” of the local subsidiaries of three of the world’s biggest banks: BNP Paribas, HSBC and RBS. Last year it declared inadequate the plans of all …<div class="og_rss_groups"></div>

via Economic Crisis


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