HM Treasury Seeks Views on Addressing Risks from Non-Bank Financial Institutions

Her Majesty's Treasury is consulting on a number of proposals aimed at assisting authorities with resolving the failure of non-bank financial institutions. The types of institutions envisaged in the proposals include investment firms, central counterparties, and insurance companies, as well as other financial infrastructure providers such as payment systems.

The proposals are intended to complement the government's ongoing work on the reform of the UK banking system. Responses to the consultation should be submitted by September 24, 2012.

[SL Comment: The discussion is of granting the UK Government "orderly liquidation" authority along the lines that Dodd-Frank provides to the U.S. government. Having said that, it would seem that the approach that the UK would take would be far more specifically defined (and thus I think preferable) to the U.S. approach where the government's resolution authority is tied to completely amorphous terms such as "interconnetedness" that may be applied in a completely subjective and arbitrary manner. See our July 23 news item on the power of FSOC to regulate "SIFIs."

View in full here (links externally to HM Treasury website).See also: July 20, 2012 news entry.