The banking crisis has taken an unusual turn,
Alister Darling has now suggested that banks adopt 'living
wills' in the event that another financial crisis hits. The idea is
to make it easier to dismantle them and distribute their assets
between other lenders and not to give the CEO's desk to his
nephew.
As the living will title suggests, the document should also
contain details as to when the 'life support' system is turned off
rather than a hastily drafted online will, the budget should
reveal the full details if the proposal gets that far. The key
impact will be to introduce more transparency in the bank's
corporate structure and set out clear regulations for
dissolution.
Will it work? Time will tell.