The Treasury select committee should ask questions over banks’ capital, bailouts and our exposure from RBS
It’s been ages – actually only three years – since the last parliamentary inquiry into the banking industry, but here comes the tireless Andrew Tyrie with another. The Treasury select committee is to ask whether the revamped capital rules, supported by arrangements to wind down failing banks, are up to the job. Taxpayers are supposed to be protected in another 2008-style crisis. Would they be?
A collective groan, one suspects, will have passed across the banking sector at news of this inquiry. The so-called capital and resolution regime, after years of debate and fine-tuning, is supposed to be set in stone. The regulators perform stress tests on the big institutions every year; and the banks’ role is to get on with the job of reorganising their operations to fit the new ringfenced model while reordering their capital structures to contain the correct portion of instruments capable of absorbing losses.
Related: MPs to test rules aimed at insuring against UK bank bailouts