Bair calls for tighter reforms

SHEILA Bair, chairwoman of the Federal Deposit Insurance Corporation in the US, called for large financial institutions to pay for the costs of their failure in an address to the National Association for Business Economics yesterday.

Bair said a “pre-funded resolution mechanism” was needed alongside a “clear mandate” that can be applied to large institutions when they fail to protect the taxpayer and preserve key financial relationships.

She also suggested that banks should hold higher capital and that tighter regulation should be applied.