Since the crisis a vast amount of work has gone into ensuring that major cross-border banks are no longer too big to fail. This paper summarises that work, describing progress made in developing resolution regimes and resolvable bank structures in the major banking jurisdictions, in providing incentives to those jurisdictions to cooperate in resolving failed banks and in requiring banks to have enough loss absorbing capacity to ensure that the answer to the question of “who pays?” when a major bank fails is no longer the taxpayer. The paper illustrates these issues by reference to the UK’s recently-published proposals on loss-absorbing capacity, which seek to link the quantum and quality of loss-absorbing capacity to the preferred resolution strategy for each bank. And the paper also emphasises that, notwithstanding the UK’s pending withdrawal from the EU, the UK will continue to cooperate with partners in the EU and elsewhere to ensure that global standards on bank resolution are respected and to promote robust arrangements to deal with the failure of large cross-border banks.
Jon Cunliffe
Sir Jon Cunliffe became Deputy Governor for Financial Stability on 1 November 2013. Jon is a member of the Bank’s Financial Policy and Monetary Policy Committees, the Bank’s Court of Directors and the Prudential Regulation Authority Board.
He has specific responsibility within the Bank for the supervision and oversight of Financial Market Infrastructures, for Resolution and for the provision of Emergency Liquidity Assistance. He is a member of the G20 Financial Stability Board Steering Committee, the Bank for International Settlements’ Board of Directors and the European Systemic Risk Board.