HM TREASURY News
Release (48/09) issued by COI News Distribution Service on 11 May 2009
Financial Services
Secretary Paul Myners today published a report setting out the
Government's initial thinking on reforms to strengthen the
UK's ability to deal with the failure of an investment bank.
Like other financial centres, London was affected by the collapse
of Lehman Brothers in September 2008 and the events that followed.
The Government is committed to implementing reforms that will
enable an easier resolution of a failing investment bank should
any such event happen again.
The report outlines the Government's thinking on the changes
to market practice, regulation, and insolvency law that might be
needed to deal with any future failue of a major investment bank.
The report considers the treatment of investment banking clients
after default, the future of their assets, and the treatment of
their open or unreconciled trading positions. It also examines
what can be done to make the process of insolvency more effective,
and to limit the damage that may be done by a failing investment bank.
These reforms are part of a package of steps aimed at renewing
the financial services sector, other aspects of which will be laid
out in the Government's forthcoming paper on financial regulation.
The reforms which are considered in this report demonstrate the
Government's commitment both to financial stability, and to
the future of London as a global investment banking hub.
Commenting on the report, Paul Myners said:
"The
UK's insolvency regime is an important aspect of its
attractiveness as an international centre for investment banking.
The Government is committed to maintaining these advantages and
strengthening the existing solvency regime."
Notes for Editors
1. The Government committed in the
Pre-Budget Report to conducting a review of the insolvency
arrangements for investment banks.
2. The Government has received advice from an Advisory Panel of
industry experts, comprising investment banks, their clients and
counterparties, and legal, insolvency and other professionals.
3. The Government welcomes responses to the issues and questions
raised in the paper by 10 July 2009.
4. The report can be found at: http://www.hm-treasury.gov.uk/consult_investment_banks.htm
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