U.K. Proposes Ways to Tackle Non-Bank Financial Firm Failures

The U.K. government set out proposals to limit the fallout from the failure of financial institutions other than banks.

The Treasury began a consultation today on ways to protect the financial system in the event of a failure of the networks that connect market participants -- investment firms, central counter-parties, payments systems and insurance companies. The consultation does not assume that a resolution regime will be necessary for each sector, the Treasury said.

“This consultation underlines the government’s commitment to maintaining the U.K.’s position as a preeminent global financial center, while also ensuring that the financial- services sector is able to provide essential services to the wider economy without posing a risk to financial stability,” Treasury minister Mark Hoban said in an e-mailed statement released by his office in London.

The move is a response to the recommendations of the Independent Commission on Banking, a blueprint for banking reform that has largely been accepted by the government. The consultation runs until Sept. 24, the Treasury said.

To contact the reporter on this story: Gonzalo Vina in London at gvina@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net