A loophole in planned banking reforms could leave taxpayers on the hook for billions of pounds during another financial crisis, according to the governor of the Bank of England (BoE).
The Telegraph reports Sir Mervyn King said protection for depositors whose savings temporarily rise above £85,000 - the current compensation limit - was needed or the government would be under pressure to resort to a state bailout again. Paul Tucker, the bank's deputy governor and man tipped to take over from King next year, said it was a "huge issue" which was unresolved. Tucker told MPs yesterday: "The best laid plans [could] get blown up." The Telegraph reports new plans would avoid a taxpayer bailout by forcing bondholder to take deep losses if a bank is on the bring of collap...
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