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Governments globally are ramping up reform activities in a bid to save taxpayers from financing future bank failures. At the same time, regulators continue to build and implement new resolution tools in readiness for the next financial crisis. We note in particular a move toward avoiding bail-outs (government support) by using bail-ins (burden sharing with investors, potentially including senior unsecured obligations). The urgency of these reforms varies by country, but we see those that suffered most during the recent financial crisis-the U.S. and Western Europe--at the forefront.
These developments have already had an impact on our rating outlooks on eight U.S. bank holding companies. And, as they continue to evolve, they may have implications for our ratings on...
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