E-Financial
New Rules to Ban Bailout for ‘Too Big to Fail’ Banks
New global rules to prevent banks that are “too big to fail” from being bailed out by taxpayers have been proposed, according to BBC.
The rules, created by the Financial Stability Board (FSB), a global regulator, will require big banks to hold much more money against losses. Mark Carney, FSB chairman and governor of the Bank of England, said the plans were a “watershed” moment.
BBC quoted him as saying that it had been “totally unfair” for taxpayers to bail out banks after the financial crisis of 2008 and 2009.
“The banks and their shareholders and their creditors got the benefit when things went well,” he told the BBC.
“But when they went wrong the British public and subsequent generations picked up the bill – and that’s going to end”.
Mr Carney explained that the new system would ensure that bank shareholders, and lenders to banks such as bondholders, would become first in line to bear the brunt of future losses if banks could not pay out of their own resources.
“Instead of having the public, governments, [and] the taxpayer rescue banks when things go wrong; the creditors of banks, the big institutions that hold the banks’ debt – not the depositors – will become the new shareholders of banks if banks make mistakes.”
“Let’s face it, the system we’ve had up until now has been totally unfair,” he added.
At its peak in the UK alone, taxpayers’ direct subsidy to banks stood at more than £1 trillion according to a recent report from the National Audit Office.
In the wake of the financial crisis, world leaders asked the FSB to come up with proposals to prevent similar bailouts from happening in the future.
The proposed new rules, which are up for consultation and should take effect in 2019, require “global systemically important banks” to hold a minimum amount of cash to ensure they will be able to survive big losses without turning to governments for help.
The capital set aside should be worth 15-20% of the bank’s assets, the FSB said. That is a far bigger cushion against losses than is required by current banking rules.
RBS sign The UK government still owns an 80% stake in Royal Bank of Scotland
The FSB hopes this stronger policy will prevent taxpayers from being forced to pay billions of pounds again to stop big banks from collapsing, in the event of another financial crisis.
Anthony Browne of the British Bankers’ Association welcomed the proposals.
“The banking industry strongly supports this work, which is a really important step in ending ‘too big to fail’ and ensuring that never again will taxpayers have to step in to bail out banks,” he said.
“We agree with the aims and objectives of the proposals for total loss absorbing capacity (‘TLAC’), that there should be sufficient resources available to absorb losses in the event of bank failure and provide new capital to ensure critical economic functions can continue to be provided,” he added.
Less disruption
“Agreement on proposals for a common international standard on total loss-absorbing capacity for [big banks] is a watershed in ending ‘too big to fail’ for banks,” said Mr Carney.
“Once implemented, these agreements will play important roles in enabling globally systemic banks to be resolved without recourse to public subsidy and without disruption to the wider financial system.”
According to the BBC’s business editor Kamal Ahmed, analysts estimate the new capital requirements could cost €200bn (£157bn) for Europe’s banks alone, with the cost for globally significant banks in the US, Japan and China likely to be much higher.
The FSB has published a list of 30 banks it regards as “systemically important”, meaning their collapse could have a wider impact on global financial systems.
In the UK, the banks are Barclays, Standard Chartered, HSBC and the Royal Bank of Scotland.
Lloyds Banking Group has been removed from the list as its potential impact on financial systems has declined in recent years.
The UK government spent around £65bn directly bailing out RBS and Lloyds during the crisis. The government still owns an 80% stake in RBS and 25% of Lloyds.
Analysis: Andrew Walker, economics correspondent, BBC News.
Lehman Brothers was the classic case of a financial institution that was too big to fail – or at least it probably was according to the previous Federal Reserve chairman Ben Bernanke.
Of course it DID fail, and the financial crisis entered a new and more dangerous phase after Lehman filed for bankruptcy in September 2008. The immediate lesson that many policy makers drew – and this is contested – was that it should have been rescued.
And so they decided that other big financial firms would not fail and taxpayers’ money was thrown at the banks around the world.
But there is another lesson drawn from the Lehman episode: that it would be far better to change the rules of finance to ensure that any bank could safely fail if it gets into serious difficulty no matter how big it is.
That’s where the Financial Stability Board’s new proposals come in.
Nigeria Deposit Insurance Corporation (NDIC) has begun the final phase of liquidation for the defunct Premier Commercial Bank, initiating the payment of liquidation dividends to verified creditors, nearly 25 years after the bank’s closure.
Premier Commercial Bank had its operating license revoked by the Central Bank of Nigeria (CBN) on December 20, 2000, following findings of financial instability and regulatory non-compliance.
Since then, the NDIC has overseen the bank’s liquidation process under a winding-up order from the Federal High Court, which designated the corporation as the official liquidator.
In a public announcement, the NDIC invited all eligible creditors to visit any of its zonal offices between June 2 and June 27, 2025, to verify and claim their entitlements.
This move marks a critical milestone in the final settlement of claims related to the bank’s collapse.
To facilitate the verification process, creditors are required to present proof of deposit or shareholding, such as a passbook, chequebook, term deposit certificate, or bank statement.
Additionally, valid identification documents must be submitted, including a driver’s license, international passport, national identity card, NIN slip/card, voter’s card, or a formal identification letter from a traditional ruler or local government chairman.
The NDIC assured the public that the ongoing settlement is part of a broader effort to bring closure to longstanding claims resulting from Premier Commercial Bank’s liquidation. The process, according to the corporation, has been designed to ensure efficient disbursement to all verified stakeholders.
Premier Commercial Bank is one of 53 deposit money banks whose licenses were revoked by the CBN between 1994 and 2018 due to various violations and signs of financial distress.
These closures were followed by legal procedures appointing the NDIC to manage asset recoveries and creditor settlements.
By initiating this final phase of payment, the NDIC is reaffirming its commitment to financial system stability and depositor protection while calling on all affected individuals and institutions to complete verification processes promptly to receive their due compensation.
Securities and Exchange Commission (SEC) has directed all public companies and Registrars to stop treating unclaimed dividends older than 12 years as “statute-barred”, especially those dating from before the enactment of the Finance Act 2020.
The directive reaffirms the provisions of Section 60 of the Finance Act, which mandates that dividends unclaimed for over six years be transferred to the Unclaimed Funds Trust Fund (UFTF), where they remain accessible to shareholders pending claims.
The Commission said that shareholders are entitled to continue to claim their dividends that are not statute-barred (that is not above 12 years) before December 31, 2020 “when the Finance Act 2020, came into effect.”
According to the SEC in a Circular, “The attention of the Securities and Exchange Commission has been drawn to the fact that paying companies and their Registrars have continued to treat unclaimed dividends of public companies that are older than 12 years as being “statute-barred” without recourse to the provisions of the Finance Act 2020.
“In response to various inquiries on the subject, the Commission hereby clarifies as follows: The import of the provisions of Section 60 of the Finance Act 2020 (December 31, 2020), is that, where dividends declared by a public company quoted on the Nigerian Exchange Limited remained unclaimed for a period of six years or more, such dividends are expected to be transferred to the Unclaimed Funds Trust Fund (UFTF) to be held in trust and managed pending when the shareholder presents a claim for such unclaimed dividends.
“Pending the setting up and operationalisation of the UFTF by the Federal Government, pursuant to its powers under Sections 3 (4) (e) and 93 of the Investments and Securities Act 2025, the Commission hereby directs public companies and their Registrars to continue to honour all requests by shareholders for the payment of unclaimed dividends as described above, with effect from December 31, 2020”.
The Commission therefore directed public companies and Registrars to effect immediate compliance with the directive and submit periodic reports on same in the manner prescribed in the Commission’s Rules and Regulations.
Federal Inland Revenue Service (FIRS) has revised its Standard Operating Procedure (SOP) as part of efforts to improve consistency, transparency, and service delivery in tax administration across the country.
According to a statement on Monday in Abuja by Mr. Collins Omokaro, Special Adviser on Communication Strategy and Advocacy to the Executive Chairman of FIRS, the revised SOP offers a unified framework for core tax processes including registration, payment, audit, and enforcement.
“This is about people, experience, and impact. It’s a step toward a tax system that supports voluntary compliance and national development,” Omokaro said.
He explained that while FIRS field offices have long operated with good intentions, inconsistent methods across different locations often created confusion for taxpayers.
The revised SOP, he said, is designed to eliminate such disparities by providing a single, clear roadmap for operations in all of the Service’s over 300 offices nationwide.
More than just a procedural manual, the new SOP is described as a statement of institutional direction, reflecting values that define the future of the Service.
Omokaro quoted Dr. Zacch Adedeji, executive chairman of FIRS, as saying that “This SOP is not just a technical document—it is a declaration of who we are becoming as a service. It reflects our commitment to transparency and service to the Nigerian people.”
The SOP update is one component of a broader reform agenda underway at FIRS, which aims to transform the agency into a fully service-oriented institution.
The changes are also aligned with the ongoing digital transformation within the agency, which is intended to harmonize human and technological systems for faster, more reliable, and taxpayer-friendly service delivery.
Internally, the SOP is expected to enhance operational efficiency and provide a foundation for improved staff training, clearer guidance, and stronger evaluation systems. Omokaro noted that every FIRS employee is expected to study, implement, and embody the procedures outlined in the new document.
“With this rollout, every FIRS staff member has a clear mandate: study it, apply it, and embody it. That’s how we’ll earn the trust of Nigerians,” he said.
The SOP reform is being introduced as part of the Service’s broader mission to reposition itself as a modern tax authority grounded in accountability, consistency, and a shared sense of national purpose.
The move comes as the FIRS continues to modernize its processes, improve tax collection efficiency, and foster a culture of voluntary compliance—all aimed at strengthening revenue mobilization to support Nigeria’s development agenda.
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