Fed's Gibson: Regulators Need Consistent Laws to Close Banks

Wednesday, 15 May 2013 11:42 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

The Federal Reserve’s top bank supervisor said regulators around the world need to achieve consistency among laws governing the shut-down of a large, global bank.

“We need to take additional actions to promote regulatory cooperation among home and host supervisors in the event of the failure of an internationally active, systemic financial firm,” Michael Gibson, director of the Fed’s Division of Banking Supervision and Regulation, said in comments prepared for testimony to a Senate Banking Committee subcommittee.

U.S. lawmakers are pressing the Fed and other bank regulators to eradicate perceptions that a public safety net remains for the largest banks. Fed officials are implementing the Dodd-Frank Act, which requires firms to plan extensively for failure and provides the Federal Deposit Insurance Corp. with the tools to wind down the biggest banks.

Gibson said “much remains to be done” to assure consistent procedures worldwide for shutting down large banks that may have subsidiaries spread through different regulatory regimes around the world.

“Further progress on cross-border resolution ultimately will require significant bilateral and multilateral agreements among U.S. regulators and the key foreign central banks and supervisors for the largest global financial firms,” Gibson said.

The Fed and FDIC are discussing a proposal that would require the largest financial firms to hold a minimum amount of long-term unsecured debt to bear potential losses or help capitalize a bridge holding company for a financial institution being shut down, Gibson said.

© Copyright 2014 Bloomberg News. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved