(Reuters) – Banks may have to scrap dividends and rein in bonuses if they breach new rules designed to ensure that creditors rather than taxpayers pick up the bill when big lenders collapse.
Mark Carney, chairman of the Financial Stability Board and Bank of England governor, said the rules, proposed on Monday, marked a watershed in putting an end to taxpayer bailouts of banks considered too big to fail.
The International Monetary Fund (IMF) has warned the government that accelerating house prices and low productivity pose the greatest threat to the UK’s economic recovery.
It said rising property values could leave households more vulnerable to income and interest rate shocks. It also called on the Bank of England to enact policy measures “early and gradually” to avoid a housing bubble.
Chancellor will try to debunk claims that a further five years of austerity will restrict growth and hurt living standards
George Osborne is to tell an audience of free-market campaigners in Washington that the UK’s economic turnaround will defy those who say austerity and low wage growth will lead to long-term stagnation. In his first major speech in the US, the chancellor will attempt to demolish claims that a further five years of austerity will restrict growth and hurt workers’ living standards.
The Bank of England’s dose of honesty throws the theoretical basis for austerity out the window
Back in the 1930s, Henry Ford is supposed to have remarked that it was a good thing that most Americans didn’t know how banking really works, because if they did, “there’d be a revolution before tomorrow morning”.