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Increasing capital requirement will stunt lending, says HSBC

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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.

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Readers' comments (1)

  • 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.”---The fractional reserve banking system has finally come full circle to bite the central banks in the arse. Burn baby burn

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