Anne-Sylvaine Chassany at FT writes of the UK’s Prudential Regulation Authority:
The PRA irked banks when it included a 3 per cent leverage ratio target in its assessment of UK lenders’ capital health. It identified shortfalls at Barclays and Nationwide, the UK’s largest building society, which have projected leverage ratios of 2.5 per cent and 2 per cent respectively under PRA tests.
Outrageous isn’t it? That banks should be asked to maintain a minimum share capital of three percent against their lending exposure — to protect the British taxpayer from future bailouts. My view is that the bar should be set at 5 percent, although this would have to be phased-in over an extended period to prevent disruption.
I hope that APRA is following developments closely. The big four Australian banks are also likely to be caught a little short.
Read more at Barclays’ threat on lending under fire – FT.com.
They (the banks) are disgusting in their “too big to fail” arrogance. In NZ the Gummint has bailed-out finance companies to the tune of $1.8B – all run by middle-class white men, and peeps still grizzle about the Treaty of Waitangi settlements paid to responsible Maori tribes. At least they haven’t lost the money.