Banks' social role key to new rules: ex-FSA head

The revision of the social contract between banks and government should be central to the debate about how to legislate against future crises, Britain's former chief regulator has said.

A social contract exists because, given that no institution has sufficient funds to pay out to all of its creditors at once, banks are only able to stay in business because of the implicit guarantee that governments will insure deposits and central banks act as lender of last resort.

Speaking to a full house a