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Banks 'will be able to avoid taxpayer bailouts in future'

8 June 2012

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Banks 'will be able to avoid taxpayer bailouts in future'
Douglas Jardine Flint - Chairman, Institute of International Finance, Inc. and Group Chairman, HSBC Holdings plc

Global banks will not be in a position where they have to rely on taxpayer-funded bailouts again in the future, a new report has indicated.

Published yesterday (7 June) by the Institute of International Finance (IIF), the study revealed that lenders are well on the way to establishing their "living wills", which will formally outline exactly how firms would be saved without such assistance.

However, the IIF noted that national regulatory bodies need to become more heavily involved in the process of dealing with cross-border banking clean-up operations if the industry is to recover fully.

Douglas Flint, chairman of the body and HSBC, explained that public confidence in banks will be restored when it becomes clear that companies can be put through an "internationally co-ordinated process to resolve their insolvency or illiquidity" while not relying on bailouts.

"We believe that we are now moving towards a situation where these two conditions can be met," he added.

By Claire Archer

Comments (2)

US Jim George says:
Jun 08, 2012 18:10 GMT
I doubt any report by any group of bankers is going to provide the public with confidence in such matters. Just look at Greek and other Euro banks today - how can we possibly not worry? Look what happened to trading at Chase and Society General before that, and Sumitomo before that and Barrings... Good grief, how in the world can anyone promise the next ship won't sink?
SG Peter Mullins says:
Jun 09, 2012 01:07 GMT
I have to agree with Jim on this one - the general public will not believe the banking industry, central bankers or any politicians who say "trust me"! That said, the industry does need to continue to put its house in order so that future crises (and there will be future crises) can be contained/minimized.
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