Laws dealing with the failure of investment banks are to be tightened, after the collapse of Lehman Brothers revealed serious shortcomings in the UK’s insolvency regime.

Alistair Darling, chancellor, will set out plans for improving the ability of clients to secure an early return of their assets and to allow counterparties to have a better idea of the status of outstanding trades when a group defaults.

But Darling has rejected a move towards a US-style Chapter 11 regime – which gave Lehman in the US protection from its creditors – arguing that his reforms would go with the grain of the British legal system.

Financial Times, Daily Telegraph