Royal Bank on global “too big to fail” list: Financial Times

Regulations would require it to maintain more capital


Royal Bank of Canada is on a list of 20 world banks that have been deemed “too big to fail,” according to a Financial Times story that quotes individuals familiar with the agenda at this week’s G20 summit in South Korea. The international Financial Stability Board has been working the a list of banks that could face enhanced scrutiny and be forced to keep extra capital locked-up as insurance against an economic meltdown. JPMorgan Chase, HSBC, Barclays and Credit Suisse are also on the list. Gordon Nixon, CEO of Royal Bank, says that it would be “unfair” and “illogical” that his bank be included. He says that although it’s the biggest bank it Canada, it doesn’t differ significantly in size from the other Canadian banks. He also said banks would do whatever they could to stay under the threshold of “too big to fail,” which could have a negative effect on the economy. “What I would say is we can shrink our balance sheet very quickly if we had to,” Nixon told the Financial Post. The issue of which banks are “too big to fail” may or may not be decided by the end of this week’s summit.

Financial Post

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Royal Bank on global “too big to fail” list: Financial Times

  1. Socialist stupidity.

  2. No bank is "too big" to fail.

  3. If a bank is anointed with too big to fail status (meaning, if it is going under the loss would be systemically catastrophic, meaning the public purse will be called upon to shore it up) there are three policy positions that come out of that status:
    1) If the public is expected to cover losses then a) it should be a MAJOR participant in the profits or b) it should be nationalized
    2) If the desire is to maintain a separation between private and government in enterprise, the rules must be re-writen in the public's interest, which means that deposit banking and investment "banking" (gambling/speculation) must be totally separtate. Therefore, "To Big to Fail" must die, as a policy concept, immediately, and the TBTF banks must be broken up under anti-trust legislation.
    3) The public accepts that a private corporation has now attained TBTF status, then they are superior to governments, and are really the new seat/locus(t) of government.

    The financial sector, for its own good (cause God know they care not a fig for our good) must be brought to heel now!

  4. There is a typo in this article.

    it's the biggest bank it Canada, <—- plz change it to in