US and UK regulators are set to take steps to ensure that their 12 largets banks will not be “too big to fail” in the future…

The strategy is expected to include measures which would mean shareholders, followed by unsecured bond holders, could expect to find values of their respective interests bearing the brunt of any losses, it is reported.

In such an event senior managment would be removed but critical business functions would continue – the focus is expected to be on Head Office / holding company level.

It will be interesting to see how this affects market pricing of bank shares and bonds going forward.

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