UK Should Reform Bank Regulation To Protect Debt Demand: BoE

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Bank of England Governor Mervyn King told the House of Lords Economic Affairs Committee on Tuesday that bank regulations should be reformed so as to remove the implicit guarantee provided to big banks that undertake risky assets, else demand for gilts would be hit. King said, "It would be a serious mistake for us to rely on the rest of the world solving this problem." "In the end, if we don't solve this problem people who buy gilts around the world will say the UK is a bit of a risk."

US has a big advantage here as they can afford to let too-important-to-fail go on because their banking sector is less than one times GDP.

Bank of England Governor Mervyn King told the House of Lords Economic Affairs Committee on Tuesday that bank regulations should be reformed so as to remove the implicit guarantee provided to big banks that undertake risky assets, else demand for gilts would be hit. (Market News Provided by RTTNews)