FCA warns Trump over ‘too big to fail’ rules

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FCA chief executive Andrew Bailey has warned of the damage to co-operation among global regulators if the Trump administration unwinds the regime for failing banks.

In an interview with the Financial Times in Washington, Bailey says there is a risk to the confidence international regulators would have in the US if it scrapped its system for handling the collapse of banks.

Last week President Trump signed an order which paves the way to overhauling the fund set up as part of the Dodd-Frank act to help regulators wind up failing banks.

Bailey says: “We would have to say do we really think there is a resolution mechanism in there that we would have confidence . . . has got what it needs to be effective?

“Unfortunately, if you can’t answer that question in the affirmative then you are undermining . . . the consensus in terms of direction of travel that has emerged in recent years. It is quite fundamental.”

He adds if the issue of “too big to fail” firms was “disrupted badly, and I hope it won’t, I really hope it won’t, that would be the element that I think would be problematic internationally.”