Sarah Breeden spoke on “taming” international banks and how, in particular, the risks these banks pose can be managed in the absence of a single global banking regulator. She looked at the critical position of the UK, in housing several systemically important banks, but also many that are neither systemically important nor have the UK domestic market as their focus. She considered the relative risks and merits of “home” and “host” state supervision of banks and how fragmentation (which meant that, for instance, the UK regulators were unaware of the non-UK problems of several institutions with key UK operations) led to balkanisation (which required almost total host state control). She considered the drivers for international reform, with strongly capitalised, liquid banks at the heart of it, the ending of too-big-to-fail and the appreciation of the risks of the wider group. She finished by looking at how the UK supervises domestic branches of international banks and the importance of appreciating the position of subsidiaries within a group. The key is to ensure sufficient and appropriately committed loss absorbing capacity is in place on a global basis. (Source: BoE speaks on international banks)