Banking regulator still expecting failures in new regime

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The senior regulator who will be in charge of supervising banks has warned that institutions will still be allowed to fail, despite more rigorous oversight of the businesses under the new regime.

Andrew Bailey, who will head up the Prudential Regulation Authority (PRA) from April, told a City audience yesterday that the new regulator will focus on key issues rather than a wide range of potential problems. However, he also emphasised that it would not mean it would be possible to avoid the banking failures seen through the financial crisis. "This will not be a zero failure regime, but one where firms can fail in an orderly way without major detriment to the wider system," he said. According to a report in the Guardian, Bailey also insisted the buck will ultimately stop with ...

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