Several large British banks will be required to draw up “living wills” by the end of the year to outline procedures to help them wind down if they fail, under proposals by the country’s financial services regulator on Thursday.
The Financial Services Authority (FSA) said banks regarded as “too big to fail” will also have to hold more capital as an insurance against the dangers posed to the financial system if they collapsed.
The living wills will include ways of splitting a bank’s deposit-taking arms from securities trading units.
“Restructuring could include clear separation between retail deposit taking business and businesses involved in proprietary trading activities, with the latter able to fail even if the former were supported in crisis conditions,” the FSA said.
The proposal stopped short of adopting suggestions by Bank of England Governor Mervyn King that banks should split low-risk retail from so-called “casino” investment banking before the need for a living will arises.
King is at odds with the government over his proposal, with British Prime Minister Gordon Brown saying that the proposal was too simplistic for modern banking and wider reform was needed.
The FSA is currently working on wills as part of a pilot program that it expects to roll out across the banking industry.
“The FSA has to reduce the danger that authorities in future will be faced with only one option — using public funds to rescue whole groups with only equity holders suffering loss and we must also limit the extent to which implicit government guarantees support unnecessary levels of risky proprietary trading,” chairman Adair Turner said.
The FSA said that bumper investment banking profits should be used to bolster balance sheets rather than be paid out in bonuses. Systemically important banks will have to hold more capital with more emphasis on the strength of national subsidiaries in global banks to ensure that the British government is not tasked with rescuing the entire group.
The Ministry of Transportation and Communications yesterday inaugurated the Danjiang Bridge across the Tamsui River in New Taipei City, saying that the structure would be an architectural icon and traffic artery for Taiwan. Feted as a major engineering achievement, the Danjiang Bridge is 920m long, 211m tall at the top of its pylon, and is the longest single-pylon asymmetric cable-stayed bridge in the world, the government’s Web site for the structure said. It was designed by late Iraqi-British architect Zaha Hadid. The structure, with a maximum deck of 70m, accommodates road and light rail traffic, and affords a 200m navigation channel for boats,
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest foundry service provider, yesterday said that global semiconductor revenue is projected to hit US$1.5 trillion in 2030, after the figure exceeds US$1 trillion this year, as artificial intelligence (AI) demand boosts consumption of token and compute power. “We are still at the beginning of the AI revolution, but we already see a significant impact across the whole semiconductor ecosystem,” TSMC deputy cochief operating officer Kevin Zhang (張曉強) said at the company’s annual technology symposium in Hsinchu City. “It is fair to say that in the past decade, smartphones and other mobile devices were
US-CHINA SUMMIT: MOFA welcomed US reassurance of no change in its Taiwan policy; Trump said he did not comment when Xi talked of opposing independence US President Donald Trump yesterday said he has not made a decision on whether to move forward with a major arms package for Taiwan after hearing concerns about it from Chinese President Xi Jinping (習近平). Trump’s comments on Taiwan came as he flew back to Washington after wrapping up critical talks in which both leaders said important progress was made in stabilizing US-China relations even as deep differences persist between the world’s two biggest powers on Iran and Taiwan. “I will make a determination,” Trump said, adding: “I’ll be making decisions. But, you know, I think the last thing we need right
TAIWAN ISSUE: US treasury secretary Scott Bessent said on the first day of meetings that ‘it wouldn’t be a US-China summit without the Taiwan issue coming up’ There were no surprises on the first day of the summit between US President Donald Trump and Chinese President Xi Jinping (習近平), the Mainland Affairs Council (MAC) said yesterday, as the government reiterated that cross-strait stability is crucial to the Asia-Pacific region, as well as the world. As the two presidents met for a highly anticipated summit yesterday, Chinese state media reported that Xi warned Trump that missteps regarding Taiwan could push their two countries into “conflict.” Trump arrived in China with accolades for his host, calling Xi a “great leader” and “friend,” and extending an invitation to visit the White House
RSS