Why Britain and the US are playing war games today

Evan Bartlett@ev_bartlett
Monday 13 October 2014 09:40
Chancellor George Osborne preparing for "war"

Leading British and American authorities are staging a simulation of a financial crisis today to ensure they know how to tackle the failure of a banking giant should it occur again in future.

The Financial Times (£) reports that all of the main players who would need to be involved in combating a "too-big-too-fail" collapse, such as one involving Goldman Sachs or Barclays, are taking part in the event in Washington DC.

It is hoped the "war games" exercise will ensure all of those involved - including chancellor George Osborne and Bank of England governor Mark Carney - will know exactly what to do should a crisis occur again like the one that affected Lehman Brothers and Northern Rock six years ago.

We are going to make sure we can handle an institution that was previously regarded as too big to fail... and this demonstrates the distance we have come over the past few years to build resilience and learn the lessons of the financial crisis.

  • George Osborne

Mr Osborne added that the results of the "war game" will be published and should reassure the public that governments will not have to bail out banks again as they had to in the 2008 financial crisis.

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