It's incredible to think this is not even on the agenda in the US. The bank rescue in the US and UK showed that the banks were "too big to fail" and now we're stuck with an even greater concentration in the banking system. Late this past week there were even discussions about shoveling Freddie/Fannie business over to the "too big to fail" banks in the US. It's bad for the system and bad for taxpayers. Not that anyone really cares about the general public taxpayers these days. The Guardian:
In only his second public statement since being appointed by the government last summer to review the structure of the banking industry, the former Bank of England economist Sir John Vickers also spelt out the need for holders of bank bonds to suffer losses when banks run into difficulty, and his commission's view that the new capital adequacy plans for the financial sector – Basel III – do not go far enough.
Vickers's much-anticipated remarks came amid an acceleration in talks between high street banks and the government to commit to lending between £160bn and £180bn to businesses this year. Discussions about disclosing more information on top pay are also continuing. The aim is to conclude negotiations with the banks before next week's high-level summit of business leaders and economic policymakers in Davos.
Vickers told his audience today that he wanted to consider "whether, and if so how" structural reforms to the banking industry could work alongside existing plans to bolster bank capital and create "recovery and resolution plans" to cope with crises. He indicated that the new rules from Basel, which could require banks to hold three times as much capital as they presently do, will still not be sufficient to ensure banks hold reserves that can be used as a cushion in the event of collapse.
