BERLIN (MNI) – Future financial market regulation must prevent big
banks from continuing to act under the assumption they will always be
saved by the government in case of emergency, SNB Vice President Thomas
Jordan said in the text of a speech to be delivered on Thursday in
Zurich.
“The too big to fail problem must absolutely be solved,” Jordan
stressed in his speech. “It is absolutely key that the government in the
future not be prone to blackmail any longer.”
The SNB Vice President said it is indispensable both from an
economic and a regulatory viewpoint that banks, in the final analysis,
be allowed to fail. “A market economy can only function efficiently when
businesses — also banks — can go bankrupt,” he argued.
Switzerland is working hard on a solution that would make it
possible for banks to fail without endangering the whole economy, Jordan
explained. “The goal is that banks assume their risks fully by
themselves in the future,” he said.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
[TOPICS: M$$EC$,M$X$$$,M$$CR$]
