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Basel III could mean banks will shun securitisation

Basel III rules could result in a long-term closure of the securitisation markets, according to JP Morgan Cazenove.

In a report, the investment bank says the Basel III rules for securitisation risk weights mean that securitisation will become less attractive to banks as it will be more of a burden on capital and returns will be lower.

The paper says: “Basel III securitisation risk-weighted asset rules could lead to a long-term securitisation market closure, with banks generating returns on equity of just 8-12 per cent, leading to an exit of the securitisation business by investment banks.”

Home Funding chief executive Tony Ward says: “The Bank of England’s financial stability report in June showed the UK banking sector needs to find around £750bn-£800bn by the end of 2012. This can really only be achieved by issuing long-term covered bonds or RMBS.

“If you have not got anything to substitute it with, you are going to build in new economics for the higher capital requirement for holding subordinated funds. This means you will have to pay more for bonds and you will have to pass it on to borrowers.”



Hoban says saving not CPMA role

Treasury financial secretary Mark Hoban says the Consumer Protection and Markets Authority should not be given an objective of increasing saving and protection levels. Money Marketing recently launched a campaign, Pave The Way To Save, calling on the new regulator to have a greater focus on encouraging individuals to save and protect themselves and their […]

Francis McGee to leave Aegon after restructure

Aegon head of corporate affairs Francis McGee is leaving the company as part of the provider’s restructure. The provider is cutting costs by 25 per cent and refocusing on the at-retirement and workplace savings markets with a number of senior management roles to be cut. It will close its third party pension administration business and […]

Charterhouse in property tie-up

Charterhouse Retirement Solutions director Terry Pritchard has joined forces with Salvus Property Advisors to form an intermediary-only private equity property fund. Salvus has recruited TV personality Martin Roberts, from the BBC’s property auction show Homes Under the Hammer, to help market the fund. Pritchard will act as sales and marketing director for Salvus. The fund, […]

Advisers press for action to close the gaps

Advisers have called on Mark Hoban to reconsider his view that the new regulator should not have an objective of increasing saving and protection levels. Responding to a question from Money Marketing at the fringe event at the Conservative conference in Birmingham this week, Hoban said the Consumer Protection and Market Authority should not be […]

Lifetime ISAs – International Evidence

By Fiona Tait, Pensions Specialist Since the announcement in March, the Lifetime ISA (LISA) has attracted controversy. Heralded as a saviour for the self-employed and the young wanting to get on the housing ladder, the new LISA risks adding confusion for savers trying to fully understand the benefits of new workplace pension savings through auto-enrolment. To […]


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