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Concerns rise as Turner says Basel isn’t tough enough

Lenders are concerned about potential further increases in capital requirements after FSA chairman Adair Turner said Basel III core tier one capital ratios are not high enough.

Speaking at the Cass Business School last week, Turner said Basel III, which requires banks to hold 4.5 per cent of core tier one capital, as well as a 2.5 per cent counter-cyclical capital buffer by 2019, does not go far enough.

He said core tier one capital ratios of between 15 and 20 per cent would be more desirable. He added that both Basel III and measures designed to end “too big to fail” scenarios are not enough to ensure financial stability.

The British Bankers Association has warned that further capital requirements could affect recovery in the sector.

A spokeswoman says: “As it is, our banks have actually done quite a lot in rebuilding their balance sheets. The whole underpinning ethos is that we are committed to restoring financial stability and promoting economic recovery, however, there does need to be a balance between stability on one hand and getting the economy going on the other. We would like to see the financial authorities take that into account and ensure any rule change would not have an adverse impact on either side of that equation.”

The Council of Mortgage Lenders warns the requirements should not be taken too far. A spokesman says: “It is about getting the balance right and making sure we have the right approach to capital requirements. Regulators must not go too far and impose excessive requirements that will bear down on the capacity of institutions to lend.”


Budget 2011: Govt accepts Hutton’s recommendations – including for MPs

The Government will consult on implementing career average pension benefits for all public sector workers after Chancellor George Osborne accepted Lord John Hutton’s reform recommendations. Delivering the Budget today, Osborne said MPs’ pensions will be reformed in line with those in the rest of the public sector, as Money Marketing revealed last week. In Hutton’s […]

Budget 2011: Lenders’ support will be crucial for deal to help FTBs

News that the Government will provide £250m to help first-time buyers purchase new-build properties will undoubtedly be popular with the big property builders. The scheme aims to help 10,000 FTBs enter the property market but there is little detail. It will be funded by the Department of Communities and local government and the housebuilder. Each […]

Northern Rock cuts fixed rates by up to 0.11%

Northern Rock has cut the rates on a selection of two and three-year fixed rate mortgages by up to 0.11 per cent. A two-year 90 per cent loan-to-value fixed rate has been reduced from 5.99 per cent to 5.88 per cent. The lender has also cut a two-year 70 per cent LTV remortgage product at […]

Tapering of annual allowance – adjusted and threshold income

The definitions of adjusted income and threshold income used to determine whether, and to what extent, someone’s annual allowance will be reduced can be confusing.  Here we try to make sense of it all. The annual allowance will be reduced for high income individuals from 6 April 2016.  Our previous article Tapering of annual allowance […]


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