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U.S. and UK to test big bank collapse in joint model run
What do they say about those people who fail to lose the lessons of history?

What do they say about those people who fail to lose the lessons of history?

WASHINGTON Fri Oct 10, 2014 6:00pm EDT

Oct 10 (Reuters) – Regulators from the United States and the United Kingdom will get together in a war room next week to see if they can cope with any possible fall-out when the next big bank topples over, the two countries said on Friday.

Treasury Secretary Jack Lew and the UK’s Chancellor of the Exchequer, George Osborne, on Monday will run a joint exercise simulating how they would prop up a large bank with operations in both countries that has landed in trouble.

Also taking part are Federal Reserve Chair Janet Yellen and Bank of England Governor Mark Carney, and the heads of a large number of other regulators, in a meeting hosted by the U.S. Federal Deposit Insurance Corporation.

“We are going to make sure that we can handle an institution that previously would have been regarded as too big to fail. We’re confident that we now have choices that did not exist in the past,” Osborne said at the International Monetary Fund’s annual meeting.

Six years after the financial crisis, politicians and regulators around the globe are keen to prove they have created rules that will allow them to let a large bank go under without spending billions in taxpayer dollars.

They have forced banks to ramp up equity and debt capital buffers to protect taxpayers against losses, and have told them to write plans that lay out how they can go through ordinarybankruptcy. The plans are so-called living wills.

Yet salvaging a bank with operations in several countries – which is the norm for most of the world’s largest banks such as Deutsche Bank, Citigroup Inc and JPMorgan – has proven to be a particularly thorny issue.

Because the failure of a big bank is such a rare event, regulators may not be used to talking to each other. There have also been suspicions that supervisors would first look to save the domestic operations of a bank, and would worry less about units abroad.

The exercise comes as regulators are about to bring to fruition further initiatives to make banking safer.

The first would force banks to have more long-term bonds that investors know can lose their value during a crisis, on top of their equity capital, to double their so-called Total Loss-Absorbing Capacity (TLAC).

A second measure, expected to be announced this weekend, will force through a change in derivative contracts, which in their current form protect investors, and complicate the winding down of a bank across borders. (Editing by Matthew Lewis)

For more information go to this link.


By | 2017-10-26T22:09:44+00:00 October 11th, 2014|Conspiracy, Featured, Main|4 Comments

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  1. Sierra Dave October 11, 2014 at 9:29 pm

    I’m thinking that after the collapse and die off. When society starts to rebuild. Restrictions should be placed on banks so they CANNOT grow too big.

    Yes, I’m for smaller government. But the corruption grows as the bank size does. And when you have the Megabanks get too big. Society is threatened if they fail.

  2. pants up, don't loot October 12, 2014 at 7:19 am

    Probably, the only two things the bigwigs are concerned with is to keep their own nest form being ‘un-feathered’ while continuing to redistribute wealth to keep their voter base of ugimmes during any nationwide/worldwide meltdown. thanks

  3. Mick McNulty October 12, 2014 at 8:14 am

    This “too big to fail” is starting to sound like “too big to save”. The losses are going to be too much. Preppers knew that but now it’s mainstream the end’s getting REAL close…

  4. pantsupdon'tloot October 12, 2014 at 6:22 pm

    Mr. Hodges you might not want to put this out in the open, but sometimes people just drive me nuts. Sierra Dave is an example. He honestly believes once we go down, be it emp, ebola, or whatever that we will come back with a small percentage of the population and become a great nation again. People just do’t get it that when we go down we are going to have more nations piling in on us we will never get up. This is not Pearl Harbor, there will be no time to back off, regroup, rebuild and launch an attack against our aggressors. God bless, thanks.

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