US-UK 'war game' to simulate failure of global bank
Regulators in the United States and Britain will carry out their first so-called war game to simulate the failure of a major cross-border bank as they test their defences against the type of crisis that crippled the financial system in 2008.
Regulators in the United States and Britain will carry out their first so-called war game to simulate the failure of a major cross-border bank as they test their defences against the type of crisis that crippled the financial system in 2008.
The exercise, involving US Federal Reserve chairwoman Janet Yellen and Bank of England governor Mark Carney, will take place tomorrow in Washington and is aimed at testing the global framework on bank resolution to ensure that no lender is too big to fail, according to the British finance ministry.
US Treasury Secretary Jack Lew, Deputy Secretary Sarah Bloom Raskin and British Chancellor of the Exchequer George Osborne will also take part.
Governments around the world are implementing a package of measures designed to put an end to publicly funded bailouts when banks collapse.
The Financial Stability Board (FSB), which consists of regulators and central bankers from around the world, plans to present new rules on this issue to a Group of 20 summit next month in Brisbane, Australia.
"We need to make sure that taxpayers are not on the hook for future bank failures," said Osborne, who told reporters at a briefing in Washington that this was the first such event. "We also need to strengthen cross-border cooperation on this issue."