Carney flies to Washington for bank war-game

Tim Wallace
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Mark Carney is building ties with the US
THE BANK of England yesterday sent almost its entire top tier of executives to Washington to test out a fictional scenario of a banking collapse with their American counterparts.

The war-game was designed to test communications and planning bet­ween the two nations, so that they would be better prep­ared for any real crash.

Britain and the US are closer together than most other countries in terms of deciding which authorities deal with different parts of a failed bank.

Governor Mark Carney went to Washington, as well as his deputies Andrew Bai­l­ey, Minouche Sha­f­ik, and Sir Jon Cunliffe, as well as City regulator Mar­tin Wheatley. They left deputy gover­nor Ben Broadbent in London minding the shop.

US regulators at the drill included Federal Reserve chair Janet Yellen and treasury secretary Jack Lew. The war-game was hosted by Federal Deposit In­s­ur­ance Corp­oration chairman Martin Gruenberg.

One problem in the financial crisis was the complex cross-border nature of the world’s biggest banks. It meant that national regulators could be tempted to salvage as much as possible of a failed banks’ assets for investors and customers in their own country, leading to further instability.

It was hoped to make the pro­cess more or­d­erly in future.

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