A bit academic perhaps, given the newsflow, but FDIC chairman Sheila Bair and Bank of England governor Mervyn King have been doing the diplomatic shuffle.
In fact they’ve got a memorandum of understanding!
It covers plans for dealing with bust or failing banks with activities in both the US and the UK, and comes with lots of promises to do lots of consulting and contingent planning and stuff.
You can read the full MOU here. If you want.
It’s complete guff. Extract:
ARTICLE THREE: COMMON PRINCIPLES REGARDING RESOLUTIONS OF FIRMS WITH CROSS-BORDER OPERATIONS
10. Managing a crisis involving the cross-border activities of a Firm is a matter of common interest for the United States and the United Kingdom. The successful management and resolution of a crisis involving a Firm with significant cross-border activities in the United States and the United Kingdom requires careful ex ante preparation to establish optimal processes and steps to ensure effective coordination and implementation of possible Resolution strategies.
11. Arrangements and tools for cross-border crisis management should be flexible and designed to allow for adaptation to the specific features of a crisis and the individual institutions involved. Cross-border arrangements will build on effective national arrangements and cooperation between the Authorities and they should undertake steps to improve their ability to promptly assess the broader effects of any banking crisis and its cross-border implications based on common terminology and analyses.
12. Arrangements for crisis management and crisis resolution should be consistent with arrangements for supervision and crisis prevention. In particular, arrangements for crisis management or crisis resolution should reflect the division of responsibilities between the Authorities and other responsible regulators and supervisors, and the coordinating role of home country regulators and supervisors.
Special Relationship – Wikipedia