subsidiarization

The buzzword is banking circles now is "subsidiarization" — the idea that banks can address regulators 'concerns by creating legal firewalls between their different businesses that stop short of full separation.

A Rush to the Banking Firewalls 2010

One reason is that it is now clear the report will set out proposals to introduce some form of subsidiarization—forcing the banks to ring fence certain activities into separate legal entities.

Why So Nervous About the ICB's Report? Simon Nixon 2011

Operational subsidiarization will certainly form part of the report, according to someone familiar with the situation.

Why So Nervous About the ICB's Report? Simon Nixon 2011

But all the U.K. banks stand to lose if functional subsidiarization is botched.

Why So Nervous About the ICB's Report? Simon Nixon 2011

"Much of the jargon making the crossover to real life is shorthand for new concepts, such as skin-in-the-game and subsidiarization, which everyone struggles to pronounce," Ms. Tahyar says.

Regulators Serve Up Alphabet Soup Jean Eaglesham 2011

If this was limited to "operational subsidiarization," whereby banks would be forced to put critical functions such as payment systems, staff and technology into a separate ring-fenced company which would provide the services to support the bank's lending activities, then all the banks would be delighted with this outcome.

Why So Nervous About the ICB's Report? Simon Nixon 2011

But the idea that the ICB will limit itself to operational subsidiarization is wishful thinking.

Why So Nervous About the ICB's Report? Simon Nixon 2011

Instead, the more controversial focus of the report will be on options for "functional subsidiarization," which will require banks to hive off certain banking activities into separate companies.

Why So Nervous About the ICB's Report? Simon Nixon 2011

"If these issues were to prove so difficult that they cannot be addressed, then obviously the pressure towards a subsidiarization becomes even stronger, because at that point supervisors will want to have simple entities that can be managed in case of their failures," he said.

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"If these issues were to prove so difficult that they cannot be addressed, then obviously the pressure towards a subsidiarization becomes even stronger, because at that point supervisors will want to have simple entities that can be managed in case of their failures," he said.

Swap Fears Are Growing, Draghi Says Natasha Brereton 2010