Banks should be allowed to fail - BoE

The Bank of England has emphasised the need for banks to face "a credible threat of closure", and recommended higher capital and liquidity reserves. "To control risk-taking, financial institutions need to face a credible threat of closure. The establishment of the UK Special Resolution Regime has increased the prospect of orderly failures of deposit-taking institutions. Greater challenges exist in dealing with failures of international financial groups," the Bank said. Banks should draw up 'w