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The big banks are fighting against efforts to impose tough new capital rules, the City watchdog revealed today.
The Financial Services Authority said feedback from banks on the Turner Review of the financial crisis showed “a number of larger firms” are against the idea of bigger capital buffers for systemically important banks — those deemed “too big to fail”.
Such institutions complain their profits will suffer if they are forced to hold more cash on their balance sheet, which they could otherwise use to chase deals. The FSA's summary of responses to Lord Turner's recent report said: “Their view contrasted with other respondents, who were more in favour of tougher requirements, which were felt to be needed to guard against failure.”
The watchdog indicated it plans to push ahead with the proposals to enforce tougher standards.
Banks also called on the regulator to take an “international approach” when looking at policy options. They felt any toughening up of capital requirements imposed by the UK alone could hit London's competitiveness.
Reader views (1)
The Banks do very well thank-you. They are the first to place tougher rules on their customers, but will not accept them from the Watchdog which (has no teeth) supposedly there to protect the Public.
We have Base Rate at the lowest level of 30 years, but banks still chargeing between 15-30% for an overdraft. I recall that in the '70s and '80s when Base Rate fell, so did the overnight lending rate on mortgages. In fact, in the case of Halifax Bank,they acutually put them up!
If the Directors of these banks were in ordinary Directos of business and had allowed themselves to get in to this sort of difficulty, then the banks would have been the first to foreclose, and more to the point try to make those Directors liable under wrongful trading rules.
Equally the Government doesn't bail out Bankrupt or Insolvent Companies; so why should we be bailing out the Banks, more to the point their Directors?
They should all be charged with wrongful trading and the whole lot locked up for fraud. If these banks are resisting the FSA Rules, then they should have their banking licenses revoked.
- The Debt Collector, Chelmsford England
