Allow insolvent banks to fail: Scotiabank CEO

The head of Canada’s most international bank says insolvent financial institutions should be allowed to fail, but in an orderly fashion.

Bank of Nova Scotia president and CEO Rick Waugh tells BNN the lesson learned from Lehman Brothers failure in 2008 should be that if a financial institution is allowed to fail, it must be done so there isn’t contagion.

“The regulators, the policymakers and all of us in the private sector, we have been working on that., There’s a lot of work being done on it, it’s still a work in progress,” he says.

With the euro zone debt crisis threatening to topple some European banks, Waugh says the “patient” must be stabilized, but it has to be dealt with quickly.