Rep Frank says banks "recognizing reality"

Sat Jan 30, 2010 4:23am EST
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DAVOS, Switzerland (Reuters) - Barney Frank, the powerful chairman of the House Financial Services Committee, said on Saturday a reported move by banks to agree on a global wind-down fund was a "major recognition of reality."

Frank was speaking as commercial lenders and major international banks met regulators and officials on Saturday after informal talks throughout the week at the World Economic Forum in Davos, Switzerland.

The Financial Times reported on Saturday that some key banks, including Deutsche Bank, had moved toward support of a global bank wind-down fund to help cover the costs of bank failures.

"Dropping the objections to (the levy) in principle is a major recognition of reality by them," Frank told Reuters.

"The problem is there is no global sovereignty."

(Reporting by Martin Howell, editing by Mike Peacock)