US, UK regulators talk financial crisis readiness

Top U.S. and British bank regulators got together on Monday to test out their preparedness for another financial crisis.

The high-level discussions, which included Federal Reserve Chairman Janet Yellen, went through the communications processes and procedures for how each nation would deal with resolving big bank failures without depending on a taxpayer bailout, the Federal Deposit Insurance Corporation said in a statement.

{mosads}The aim of the exercise was designed to avoid a repeat of 2008, which led to a massive package of assistance for the nation’s largest banks and led to a deep recession. 

The United States and United Kingdom have been working together for the past couple of years and they have teamed up to publish a joint paper on the resolution of banks deemed systemically important.

The officials included Treasury Secretary Jack Lew, Comptroller of the Currency Thomas Curry and Securities and Exchange Commission Chairwoman Mary Jo White as well as U.K. Chancellor of the Exchequer George Osborne and Bank of England Governor Mark Carney.

The event was hosted by Federal Deposit Insurance Corporation Chairman Martin Gruenberg.

In response to the financial crisis more than six years ago, Congress passed the Dodd-Frank law that put stricter rules on banks, including higher capital requirements to ensure they have funds available in case of another economic downturn that creates unexpected losses.