FTSE 100
Dow Jones

Monday, 9 January 2012

Senior bankers spouting off

A meeting of central bank regulators at the BIS in Basel has concluded that banks will be required to hold emergency stocks of liquid assets starting in 2015 .

The central bankers and regulators from 27 major economies rejected industry pleas for a delay or substantial rewrite of the controversial planned “liquidity coverage ratio” that will require banks to hold buffers against a 30-day market crisis.  Bankers say it will constrain lending, harm economic growth and make the banking system vulnerable to sovereign debt issues.

The answer to that is that it just means the banks need more capital, so the returns are lower, which means that the bank management will have to be paid less because they won't be making the same return on capital.

No comments: