29 global banks deemed 'too big to fail'

The Financial Stability Board, the global banking regulator, Friday released its list of the 29 global banks it considers too big to fail.

The regulatordefines these as financial institutions whose size and interconnectednessare such that they would require the support of public funds in case they failed to prevent widespread economic harm.

Leaders meeting at the G20 summit in Canneshave agreed to tighter newrules that will force the 29 financial institutions to increase their ratio of cash reserves to loans, to protect themselves against a possible drop in the value of those loans.

There are no Canadian banks on the list. The release came the same day the FSB announced thatMark Carney, the governor of the Bank of Canada, will become its chairman.

The surcharges the FSB will impose on the 29 banks will increase cash in a range of from one to 2.5 percentage points, depending on how much importance the board judges the bank to be to the global financial system.

The failure of investment banks Lehman Brothers and Bear Sterns and the bailout of other financial institutions, such as AIG and several European banks, during the financial crisis in 2008 led the G20 to come up with tougher regulations.