View more on these topics

Basel Committee expected to raise capital reserve limit to 7%

The Basel Committee is expected to approve an increase in the core minimun capital reserve limit from 2 per cent to 7 per cent when they meet on Sunday, according to reports.

BBC business editor Robert Peston says the rise faced stiff competition, led by Germany where banks tend to have much lower reserve levels in the form of equity and retained earnings.

The new rules were drawn up by the committee on banking supervision at a meeting in Switzerland on Tuesday.

Any bank which fails to keep above their buffer would have to curb payouts such as bonuses and dividends, according to reuters.

Peston says the UK, US and Switzerland were pushing for it to be set  at 10 per cent.

He adds that it is likely to cause a short-term slow down of lending as most banks -particularly in Europe – hold reserves below that figure but that many in the UK currently hold reserves  of around 10 per cent.

If the measure is passed by the committee at the weekend it will need to be ratified by the heads of governments at the G20 summit in November.

Mediobanca bank analyst Chris Wheeler has been reported as saying: “There seems to be a consensus building around seven per cent core tier 1 ration and the market is pretty well there already, in fact it is comfortably above it in many cases.”

Recommended

17

Stephen Gay must be given a chance to succeed

Since news that Stephen Gay was to take over as Aifa director general broke on Friday the majority of responses on our website have been negative. Questions have been raised about Gay’s provider background and whether he will be able to “cross the fence” to represent the IFA community. Can someone who has argued the […]

Is Australia still right for Qrops?

Davies’ VIEW Although qualifying recognised overseas pension schemes were arguably born Down Under, we may now be seeing a swing away from funds being transferred to Australia. One of the final actions watched over by Australia’s last government was to abolish the foreign investment fund legislation. The FIF regime demanded tax on permanent resident’s pension […]

3

‘Six-week PMI options need health warning’

Six-week option plans sold with private medical insurance should come with a health warning, according to the Association of Medical Insurance Intermediaries. The options offer a premium discount of around 20 per cent and provide immediate treatment if treatment is not available on the NHS within six weeks. But AMII chairman Andrew Tripp says: “Where […]

HMRC helping to remove artificial gains

An investment bond offers investors certain tax advantages, one of which is the ability to take partial surrenders from the investment. This facility allows the policyholder to withdraw amounts up to 5% of the amount invested each policy year on a tax deferred basis, without incurring any immediate tax liability. This tax deferred allowance can […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment