BOE says European Union bank-failure Bill may hinder too-big-to-fail fix
Bill sets out 5-day moratorium on payments from failed banks undergoing restructuring
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London
THE Bank of England (BOE) took aim at a European Union plan to boost supervisors' powers to stop cash leaving ailing lenders, adding its weight to mounting criticism of a Bill intended to make sure big banks can be wound down without wreaking havoc on the economy.
The BOE warned of "very serious consequences" if lawmakers adopt an EU Bill that sets out a five-day moratorium on payments from failed banks in the process of restructuring. The stay is out of sync with an existing industry agreement that stops banks from winding up derivatives contracts with a struggling firm for two days, according to a BOE working paper seen by Bloomberg News.
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