Central bank officials from the U.S. and U.K. have hit back at critics who claim the G20 push to establish special resolution regimes for failing banks amounts to a bureaucratic power grab.
"Resolution is a new paradigm. None of us were set up in 2008 to manage the failure of large banks, but as part of that paradigm, in setting out to end too-big-to-fail, we want to make the market work," said Andrew Gracie, executive director for resolution at the Bank of England (BOE). "This is not a power grab by power-hungry authorities. This means where there is a falling knife, shareholders and creditors of these enterprises catch the knife – not taxpayers."
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