"This white paper sets out the Coalition Government’s proposals for implementation. The aims of these reforms are clear. First, since future financial crises rarely repeat the pattern of the past, we must focus on making banks more resilient to shocks.
Second, we must make our banks more resolvable so that, should they fail, it is in a manner that does not threaten the provision of vital services essential to the real economy. Seeing through these aims will curb excessive risk taking in financial markets – it must be clear that creditors reap rewards when banks do well, but take the pain if banks fail.
These reforms are a vital step forwards in creating the right environment for competition in banking to flourish. Reducing the perceived implicit guarantee which predominantly benefits the larger systemic banks will encourage greater competition as well as enhance financial stability, ensuring wider lending to consumers and SMEs."