Increasing capital requirement will stunt lending, says HSBC

HSBC group chairman Douglas Flint says hiking core tier one capital ratios to 10 per cent will stunt lending.

Speaking yesterday to MPs in a Treasury Select Committee looking at the Independent Commission on Banking’s proposals, Flint said even a 1 per cent increase in capital requirements will stop banks from lending billions.

He said: “Our capital base is about £140bn globally. So if you stick another 1 per cent, you are taking hundreds of billions of credit capacity out of lending.”

Flint confirmed HSBC had made the point to the ICB.

In a later TSC meeting, Barclays chief executive Bob Diamond warned that capital requirements of 10 per cent are “too high” and would affect lending levels.