UK sets out proposals on managing failure of financial firms

Britain's Treasury department on Thursday set out proposals to help manage the failure of small banks, which it said would lead to some costs being met by industry rather than the taxpayer.

"The government believes this targeted enhancement would give the Bank of England greater flexibility to manage the failure of small banks effectively," the department said in a statement. The proposals would reinforce Britain's "robust regulatory regime" and ensure there continue to be sufficient protections for financial stability, customers and public funds when banks fail, it added.

The consultation comes after the sudden collapse of California-based Silicon Valley Bank last year that sent shockwaves through financial markets. HSBC stepped in to buy the UK arm of SVB

for a symbolic one pound.