Research undertaken by the Institute of International Finance (IIF) proposed a number of changes to the regulation of global banking to address concerns over institutions deemed âtoo-big-to-failâ.
The study called for the introduction of resolution regimes, which would lead to financial losses being carried by shareholders and unprotected creditors rather than the taxpayer.
Further recommendations included ensuring effective resolution planning is in place and allowing the authorities to have effective powers of âearly interventionâ in the case of ailing firms.
Peter Sands, group chief executive at Standard Chartered and chair of the IIFâs Special Committee on Effective Regulation, said: âThe top priority has to be to strengthen the global systemâs ability to avoid failures.â
âWe need to build a more robust system and this demands continued further improvements in risk management and governance in banks, enhanced well-balanced regulation, a renewed focus on effective supervision, and sound macro-prudential oversight. â
He added: âAuthorities need to be provided with the full range of powers necessary to protect the public interest and this includes the power to intervene at an appropriately early stage when a firm is in difficulty.â
The group represents more than 400 financial institutions from across the world.
By Jim Ottewill