Britain Moves on Too Big to Fail

By Simon Johnson

The WSJ reports (on-line):

“The U.K.’s top treasury official Sunday said the government is starting a process to rebuild the country’s banking system, likely pressing major divestments from institutions and trying to attract new retail banks to the market.”

The British style is typically understated and policymakers always like to play down radical departures, but this is huge news.

Pressure from the EU has apparently had major impact – worries about unfair competition through subsidizing “too big to fail” banks are very real within the European market place. Also, strong voices from within the Bank of England have helped to move the consensus.

The US position on protecting everything about our largest banks is starting to look increasingly isolated and out of step with best practice in other industrialized countries. Time to start planning for the break-up of Citigroup (C).

Comments

[Tony Petroski:]

"The U.K.’s top treasury official Sunday said the government is starting a process to rebuild the country’s banking system..."

"this is huge news."

Indeed, it is.

Tell us who the "top treasury official" is and get started on the book that will tell us the rest.

Nov 02 11:50 AM

[Davewmart:]

'The U.K.’s top treasury official'

This seems to be a rather strangely worded reference to Alaister Darling, the Chancellor of the Exchequer, who is certainly talking about splitting the banks.

Nov 04 04:42 PM