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business4h ago
Central bank bosses enlist for war game to gauge threat of Lehman-style bust
- Regulators from the US, UK and EU will join a Washington desktop war game to test responses to a global bank collapse.
- The exercise, hosted near the IMF meetings, aims to coordinate cross-border responses among regulators.
- Participants include the Federal Reserve, the European Central Bank and the Bank of England’s governor Andrew Bailey.
- The exercise is a 'desktop' stress test held behind closed doors in Washington.
- The FDIC described the event as a trilateral principal level exercise.
- The purpose is to strengthen cross-border resolution and confidence in orderly outcomes.
- The timing follows IMF and World Bank spring meetings and rising AI-related stability concerns.
- Bailey chairs the Financial Stability Board and warns about rapid AI-driven changes.
- The FDIC intends the exercise to improve coordination for global systemically important banks.
- The meetings occur during IMF and World Bank gatherings in Washington.
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