View more on these topics

HSBC says raising banks’ cap-ad will hit lending

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

The Independent Commission on Banking’s interim report, published in April, proposed increasing banks’ current 7 per cent minimum capital adequacy reserves to 10 per cent.

Giving evidence to the Treasury select committee last week, Flint said even a 1 per cent increase in capital requirements will cut lending by billions. He said: “Our capital base is about £140bn globally, so if you stick on another 1 per cent, you are taking hundreds of billions of credit capacity out of lending.”

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

Emba group sales and marketing director Mike Fitzgerald says: “Forcing banks to hold too much money is wrong, it will only inhibit lending.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com