HM Treasury launched a consultation on resolving stability-threatening problems in the non-bank financial sector on 1 August 2012. The press release is here and the consultation document is here. From the press release:
“…banks are only part of the financial system. Other types of financial institution can also pose a risk to financial stability, if there is no way for them to fail safely. And the disorderly failure of ‘financial market infrastructures’ – networks that connect market participants to each other – could also severely disrupt both financial markets and the normal functioning of the wider economy.
The Government is therefore publishing today a consultation on proposals to ensure that if parts of the financial system other than banks run into trouble, they can fail in a way that does not threaten financial stability, without requiring taxpayer support. The consultation focuses on investment firms and financial holding companies, ‘central counterparties’ that place themselves in between two parties to certain financial transactions, other financial market infrastructures (such as payments systems), and insurers.”
The consultation closes on 24 September 2012.
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