E-Financial
New Rules to Ban Bailout for ‘Too Big to Fail’ Banks
New global rules to prevent banks that are “too big to fail” from being bailed out by taxpayers have been proposed, according to BBC.
The rules, created by the Financial Stability Board (FSB), a global regulator, will require big banks to hold much more money against losses. Mark Carney, FSB chairman and governor of the Bank of England, said the plans were a “watershed” moment.
BBC quoted him as saying that it had been “totally unfair” for taxpayers to bail out banks after the financial crisis of 2008 and 2009.
“The banks and their shareholders and their creditors got the benefit when things went well,” he told the BBC.
“But when they went wrong the British public and subsequent generations picked up the bill – and that’s going to end”.
Mr Carney explained that the new system would ensure that bank shareholders, and lenders to banks such as bondholders, would become first in line to bear the brunt of future losses if banks could not pay out of their own resources.
“Instead of having the public, governments, [and] the taxpayer rescue banks when things go wrong; the creditors of banks, the big institutions that hold the banks’ debt – not the depositors – will become the new shareholders of banks if banks make mistakes.”
“Let’s face it, the system we’ve had up until now has been totally unfair,” he added.
At its peak in the UK alone, taxpayers’ direct subsidy to banks stood at more than £1 trillion according to a recent report from the National Audit Office.
In the wake of the financial crisis, world leaders asked the FSB to come up with proposals to prevent similar bailouts from happening in the future.
The proposed new rules, which are up for consultation and should take effect in 2019, require “global systemically important banks” to hold a minimum amount of cash to ensure they will be able to survive big losses without turning to governments for help.
The capital set aside should be worth 15-20% of the bank’s assets, the FSB said. That is a far bigger cushion against losses than is required by current banking rules.
RBS sign The UK government still owns an 80% stake in Royal Bank of Scotland
The FSB hopes this stronger policy will prevent taxpayers from being forced to pay billions of pounds again to stop big banks from collapsing, in the event of another financial crisis.
Anthony Browne of the British Bankers’ Association welcomed the proposals.
“The banking industry strongly supports this work, which is a really important step in ending ‘too big to fail’ and ensuring that never again will taxpayers have to step in to bail out banks,” he said.
“We agree with the aims and objectives of the proposals for total loss absorbing capacity (‘TLAC’), that there should be sufficient resources available to absorb losses in the event of bank failure and provide new capital to ensure critical economic functions can continue to be provided,” he added.
Less disruption
“Agreement on proposals for a common international standard on total loss-absorbing capacity for [big banks] is a watershed in ending ‘too big to fail’ for banks,” said Mr Carney.
“Once implemented, these agreements will play important roles in enabling globally systemic banks to be resolved without recourse to public subsidy and without disruption to the wider financial system.”
According to the BBC’s business editor Kamal Ahmed, analysts estimate the new capital requirements could cost €200bn (£157bn) for Europe’s banks alone, with the cost for globally significant banks in the US, Japan and China likely to be much higher.
The FSB has published a list of 30 banks it regards as “systemically important”, meaning their collapse could have a wider impact on global financial systems.
In the UK, the banks are Barclays, Standard Chartered, HSBC and the Royal Bank of Scotland.
Lloyds Banking Group has been removed from the list as its potential impact on financial systems has declined in recent years.
The UK government spent around £65bn directly bailing out RBS and Lloyds during the crisis. The government still owns an 80% stake in RBS and 25% of Lloyds.
Analysis: Andrew Walker, economics correspondent, BBC News.
Lehman Brothers was the classic case of a financial institution that was too big to fail – or at least it probably was according to the previous Federal Reserve chairman Ben Bernanke.
Of course it DID fail, and the financial crisis entered a new and more dangerous phase after Lehman filed for bankruptcy in September 2008. The immediate lesson that many policy makers drew – and this is contested – was that it should have been rescued.
And so they decided that other big financial firms would not fail and taxpayers’ money was thrown at the banks around the world.
But there is another lesson drawn from the Lehman episode: that it would be far better to change the rules of finance to ensure that any bank could safely fail if it gets into serious difficulty no matter how big it is.
That’s where the Financial Stability Board’s new proposals come in.
Fidelity Bank Plc is basking in endless and stakeholders are happy.
Dr. Nneka Onyeali-Ikpe, managing director and chief executive officer, Fidelity Bank Plc
With nearly 10 million customers, Fidelity Bank is demonstrating excellent market traction.
This a crucial evidence for investors that the bank is solution driven.
For instance, at the capital market, the bank was the toast of investors as its market value surged amid bargain hunting on the Nigerian Exchange, with investors gaining more than 11 percent after few days of tradings last week only.
Fidelity Bank’s share price increased to N22.30 at the close of the market last Friday, as 11.227 million units valued at N251.523 million.
Investors are simply reacting positively to strong earnings, technology-driven growth, and strategic expansions.
Fidelity Bank, emerged a more robust financial institution after the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) ordered massive banking recapitalization exercise.
Dr. Nneka Onyeali-Ikpe, managing director and chief executive officer, Fidelity Bank Plc, is being credited for driving these exceptional shareholder value, operational performance, and sustainable growth.
Despite the immense responsibility and intense pressure, especially during turbulent times, Onyeali-Ikpe, has been strutting her stuff by strategic vision and exemplary leadership.
Onyeali-Ikpe has built Fidelity Bank as beacon in the banking industry underpinning the bank with trust, innovative technology, strategic growth, and strong leadership as well as reputation.
She has broken every glass ceilings delivering milestones and solid imprints in the annals of banking.
The bank only recently completed CBN-verified share allotment, hitting N532 billion capital.
This heavy chest now guarantees the bank long-term stability, and enabling it operate with speed.
Since appointment on January 1, 2021, Onyeali-Ikpe, has-anchored the bank on bespoke digital, financial, and technology-driven tools designed to enhance customer experience.
By integrating AI, automation, and advanced data analytics, Fidelity Bank is today delivering solution banking.
Under Onyeali-Ikpe’s leadership, the bank has significantly improved brand equity.
Fidelity Bank also announced the completion of the acquisition of a 100 per cent stake in Union Bank UK, under the CEO.
A recent Brand Finance report ranked Fidelity Bank as the fastest-growing Nigerian brand, with its brand value more than tripling.
Onyeali-Ikpe was also named among the 2024 Most Influential Global Top 100 Export and International Trade Leaders, recognizing her contribution to expanding Nigeria’s trade and export financing capabilities.
Under her, Fidelity Bank has received multiple awards, including Export Finance Bank of the Year (2023 BAFI Awards), Best Payment Solution Provider Nigeria 2023, and Best SME Bank Nigeria 2022 (Global Banking and Finance Awards).
The bank was also recognized by Euromoney for Best Bank for SMEs (2023) and Best Domestic Private Bank in Nigeria (2023).
Onyeali-Ikpe will be leaving as head of the bank this year but her record of placing the institution upward trajectory will be indelible.
She may be leaving “big shoes to fill” because of her high-energy, infectious positivity which made her successful in everything she does.
First City Monument Bank (FCMB), in partnership with BHM, hosted the pilot edition of The Monetised Content Masterclass, bringing together reporters, content creators and editors to address growing pressure on the sustainability of newsrooms and media platforms.
L-R: Adeola Adejokun, Head, Communications, First City Monument Bank; Chris Ihidero, Award-winning Director and Producer; and Diran Olojo, Divisional Head, Corporate Affairs, First City Monument Bank, during the Monetised Content: A Media Masterclass Presented by FCMB and BHM, in Victoria Island. Lagos on Monday, April 20, 2206.
The session comes at a time when traditional advertising revenues are declining for news publishers, even as Nigeria’s entertainment and digital media market continues to grow and is projected to reach $4.9 billion by 2026.
Against this backdrop, the masterclass focused on practical ways for media organisations, independent content creators, and digital platform owners to diversify income, build financial resilience, and sustain editorial independence and integrity.
Participants explored revenue opportunities beyond traditional advertising, including brand partnerships, digital content monetisation, and audience-led models. The one-day session featured panel discussions, Q&A sessions, and peer exchanges designed to translate industry trends into practical action.
Speaking at the event, Divisional Head, Corporate Affairs, FCMB Group, Diran Olojo, said: “Traditional models are under pressure, and attention is more fragmented than ever. The focus now is on building structured, sustainable platforms that can deliver both impact and long-term value.”
Also speaking, CEO and Founder of BHM, Ayeni Adekunle, said: “The economics of media have changed. For journalism to remain independent, it must also become financially resilient. That shift requires new thinking and deliberate action.”
The session was moderated by Fatu Ogwuche, Founder and CEO of Big Tech This Week, and featured speakers including investigative journalist Fisayo Soyombo, storyteller and producer Chris Ihidero, executive and storytelling expert Jennifer Mairo, and digital media entrepreneur Peter Oluka.
The initiative reflects a shared commitment by FCMB and BHM to support the long-term sustainability of the Nigerian media ecosystem through capacity building and industry collaboration.
Chartered Risk Management Institute of Nigeria (CRMI) has backed recent regulatory measures by the Central Bank of Nigeria (CBN) aimed at strengthening the security of the country’s digital financial ecosystem, while urging stricter compliance across the banking industry.
Kevin Ugwuoke, president and chairman of Council, in a statement, described the new framework as a timely and proactive response to rising risks such as fraud, identity theft, and unauthorised access within the instant payment system.
He noted that key safeguards introduced by the apex bank including a N20,000 transaction limit on newly activated mobile banking applications within the first 24 hours, mandatory device binding, and real-time enterprise fraud monitoring are designed to reduce vulnerabilities associated with account takeovers, especially during the early stages of account activation.
“By limiting transaction exposure during the high-risk activation window, the framework significantly reduces the opportunity for fraudsters to exploit newly onboarded or compromised accounts,” Ugwuoke said.
The institute, however, stressed that the success of the measures would depend largely on effective implementation.
It called on banks, fintech firms and payment service providers to strengthen cybersecurity infrastructure, invest in fraud analytics and prioritise staff training as well as customer awareness.
CRMI also welcomed the introduction of the Nigerian Overnight Financing Rate (NOFR), describing it as a major step toward standardising overnight funding rates, deepening financial markets and improving monetary policy transmission in line with global best practices.
The endorsement comes as the CBN unveiled a draft revised Guide to Charges for Banks and Other Financial Institutions, 2026, signalling a broader shift toward transparency, consumer protection and efficiency in the financial system.
The revised guide introduces caps on key banking charges and mandates stricter disclosure requirements.
Under the framework, interbank transfers between N5,000 and N50,000 are capped at N10, while transactions above N50,000 attract a maximum of N50, with transfers below N5,000 remaining free.
The apex bank also standardised ATM withdrawal charges, pegging fees at N100 per N20,000 for on-site withdrawals from other banks’ machines, while off-site transactions may attract an additional surcharge of up to N500, subject to disclosure at the point of use.
In a bid to protect borrowers, the regulator directed that all lending rates be presented as Annual Percentage Rates (APR), ensuring full disclosure of interest and associated fees.
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