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Exact(13)
"To pretend they will be allowed to fail is not credible".
As elsewhere no "system-relevant" bank will be allowed to fail; no depositor will lose money.
Now, for the first time, it is sorting the strong from the weak even if it has made clear that none will be allowed to fail.
Now that the Obama administration has designated GMAC as the preferred lender for Chrysler as well, many analysts doubt that the firm will be allowed to fail.
They say all banks owe their existence to the taxpayer because they have all benefited from the explicit guarantee that none of them will be allowed to fail.
The next head of the Fed faces controversial decisions, in particular, about what safeguards to impose on the largest financial institutions to make it credible that if they falter, they will be allowed to fail.
Similar(47)
They will never be allowed to fail, and they will be closely monitored," he said.
That in turn implies a belief that the biggest banks will not be allowed to fail.
The market knows, and the banks know, that a Landesbank will not be allowed to fail.
But it is not clear that any of these banks will actually be allowed to fail the stress tests.
"There is an expectation that very large and complicated financial institutions will not be allowed to fail," he said.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com