‘Don’t put all your eggs in one basket’: protecting banks from the failure of individual counterparties

Daniel Chapman (), Hugh Miller, Katia Pascarella and Lynnette Withfield ()
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Daniel Chapman: Bank of England
Hugh Miller: Bank of England
Katia Pascarella: Bank of England
Lynnette Withfield: Bank of England

Bank of England Quarterly Bulletin, 2020, vol. 60, issue 2, 1-1

Abstract: Regulators across the world recognise that monitoring banks’ large exposures is necessary for sound prudential regulation and effective supervision of banks and banking systems. Both internationally and in the UK, a large exposure (LE) framework is in place to limit the maximum loss a bank could face in the event of sudden counterparty failure. This article looks at the current LE regime in the UK and how it has evolved over time to become a key element of financial services regulation.

Date: 2020
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