What’s next for global bank regulation following Silicon Valley, Credit Suisse collapses?

Global Counsel convened an experienced panel for a virtual conversation on the historical context of recent events, and on where US, UK and European banks – and bank policymakers – might go from here. Bob Diamond was president of Barclays when it acquired the majority of assets of Lehman Brothers after Lehman went bankrupt in the throes of the Global Financial Crisis (GFC) in 2008. Diamond has more than 40 years’ experience as a financial services executive at firms including Credit Suisse. Global Counsel Chairman and co-founder Peter Mandelson was UK Business Secretary in 2008, overseeing the British government’s path through the GFC, from bank bailouts to mergers. Rebecca Park heads Global Counsel’s Financial Services practice from London, and has more than a decade’s experience in financial services as a policy analyst, bank trade association executive and lawyer while Erin Caddell has covered global banks and bank policy for more than 20 years and leads GC’s practice in Washington, DC.

The panel discussed:

• What are the factors that have led to the sudden market instability we are seeing in the US and European banking landscape? Should regulators have seen this coming, and if so, what should they have done?
   
• The policy responses to the bank failures are already drawing controversy, from an ad-hoc extension of protections for uninsured deposits by US policymakers in the wake of Silicon Valley’s collapse, to a zeroing-out of a special class of debt issued by Credit Suisse post-GFC designed to make it better able to weather a financial storm. What do government officials’ actions so far say about how they might respond to further bank stress, either now or in the future?
   
• What are lessons learned from the GFC or prior banking crises that can help in preparing for the next?
   
• The US regional bank sector has come under particular stress in the recent conflagration, with “too-big-to-fail” US banks that enjoy implicit government support the apparent beneficiaries. Should US policy be recalibrated to provide support for non-TBTF banks through measures like unlimited deposit insurance?
   
• What do UK and EU regulators’ actions in the Silicon Valley and Credit Suisse situations say about their agendas for financial services policy going forward with regards to capital requirements, ring-fencing of retail banking assets, etc.?