Press Notice



The Treasury Committee will be taking evidence on the ‘too important to fail’ dilemma in early 2010.  At the height of the financial crisis, Governments authorised a massive injection of public funds to rescue ailing private financial institutions in order to prevent a collapse of the financial system. There is general agreement of the need to minimise the risk of this re-occurring both because of the cost to the public purse, and because, for many commentators, the implicit assumption that Governments will step in to support private financial institutions that are simply ‘too important to fail’ will drive excessive risk taking such as that which created the crisis.

The Committee seeks evidence on:

• The extent to which the structure of the current financial system should be reformed, and certain activities regulated, on the grounds of systemic risk.

(Both the national dimension and international dimension are relevant, as private financial institutions that might be considered ‘too important to fail’ may operate in a purely national context or across borders.)

The Committee seeks evidence in particular on:

• The extent to which banks operating in the UK are interconnected (eg in terms of inter-bank exposure, and risks to customers and, more generally, public confidence in the banking system).

• The relationship between size and risk, and business model (including mutual models) and risk.

• The pros and cons of a legal separation of low-risk banking activities such as the management of retail deposits from high-risk activities such as proprietary trading - often referred to as ‘narrow-banking’ options.

• The pros and cons of alternative methods of preventing financial institutions from being ‘too important to fail’ (eg minimum capital and liquidity requirements, ‘living wills’, taxation) and analysis of their likely effectiveness and feasibility including timescales for implementation.

• The challenges posed by cross-border financial institutions and of ways, including subsidiarisation as opposed to branches, of reducing systemic risk on a European or global scale.

• The extent to which individual nations, or regional groups, can or should act alone on the regulation of cross-border entities.


Written evidence should be in Word or rich text format-not PDF format-and sent by e-mail to The body of the e-mail must include a contact name, telephone number and postal address. The e-mail should also make clear who the submission is from. The deadline is 12 noon on Thursday 14 January 2010. Submissions should be no longer than 3000 words. Submissions should be in the format of a self-contained memorandum. Paragraphs should be numbered for ease of reference, and the document must include an executive summary. Further guidance on the submission of evidence can be found at

Submissions should be original work, not previously published or circulated elsewhere. Once submitted, your submission becomes the property of the Committee and no public use should be made of it unless you have first obtained permission from the Clerk of the Committee. Please bear in mind that Committees are not able to investigate individual cases.

The Committee normally, though not always, chooses to publish the written evidence it receives, either by printing the evidence, publishing it on the internet or by making it publicly available through the Parliamentary Archives. If there is any information you believe to be sensitive you should highlight it and explain what harm you believe would result from its disclosure; the Committee will take this into account in deciding whether to publish or further disclose the evidence.

For data protection purposes, it would be helpful if individuals wishing to submit written evidence send their contact details in a covering letter. You should be aware that there may be circumstances in which the House of Commons will be required to communicate information to third parties on request, in order to comply with its obligations under the Freedom of Information Act 2000.


Committee Membership is as follows: Rt Hon John McFall (Chairman), Nick Ainger, Mr Graham Brady, Mr Colin Breed, Jim Cousins, Mr Michael Fallon (Sub-Committee Chairman), Ms Sally Keeble, Mr Andrew Love, John Mann, Mr James Plaskitt, John Thurso, Mr Mark Todd, Mr Andrew Tyrie, Sir Peter Viggers.

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