BOE Says EU Bank-Failure Bill May Hinder Too-Big-to-Fail Fix
- EU bill foresees two payment-halt tools for bank supervisors
- AFME’s Bannister says bill would undermine goals of resolution
The skyscraper headquarter offices of the European Central Bank (ECB) stand beside the River Main as commercial and residential property sits on the city skyline in Frankfurt, Germany, on Thursday, Feb. 2, 2017. Frankfurt expects as many 10,000 workers from Britain's financial services industry to relocate to Germany's banking capital because of Brexit, with the exodus likely to start within weeks, according to lobby group Frankfurt Main Finance.
Photographer: Krisztian Bocsi/BloombergThe Bank of England 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.