British banks given a year's grace on liquidity

[Cees Binkhorst]

REPLY TO: D66 at nic.surfnet.nl

De Engelse banken hebben dus nu £280bn vermogen en moeten nog £110bn
meer hebben en die verhoging mag dan £2.2bn hogere kosten met zich
meebrengen.
Als het tegenzit echter moeten ze £620bn meer hebben en die zouden dan
£9.2bn meer gaan kosten.
Gezien de relatief geringe kosten (1,5 tot 2%) komt dit geld van de
Engelse Centrale Bank, en verhoogt dit het financieringstekort.

Deze kapitaalsverhoging komt er even niet, omdat de banken deze kosten
niet kunnen dragen.

Dit boezemt geen vertrouwen in!

Groet / Cees

British banks given a year's grace on liquidity
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7399812/British-banks-given-a-years-grace-on-liquidity.html
Britain's banks have been given a period of grace before strict new
rules on liquidity are introduced that will cost more than £2bn and
potentially derail economic growth.

Reflecting concerns expressed by lenders, the Financial Services
Authority (FSA) yesterday conceded it would be "premature to increase
liquidity requirements across the industry at the current time". When it
announced the revised standards last October, the FSA said it would "not
tighten before economic recovery is assured".

The rules are now not expected to be introduced before 2011 after the
regulator said its next announcement would be in the final three months
of this year.

The new liquidity regime is an attempt to ensure that a lender's
treasury assets are readily convertible into cash in a crisis so it can
pay out to customers without resorting to state help if there is a run
as was the case with Northern Rock.

Banks such as HBOS were using their treasury portfolios, which are meant
to be super safe, to generate income by buying sub-prime mortgages.
Under the new rules, banks will be barred from holding anything except
gilts and customer deposits which are easy to sell.

According to the FSA, banks had just £280bn of qualifying assets last
October. They will need to raise £110bn more by replacing corporate
bonds and asset backed securities with gilts. Under such a scenario, the
regulator said the lost potential income would be £2.2bn a year compared
with "the average return in December 2007".

Under its extreme scenario, the FSA said, banks would need to raise
£620bn at a cost of £9.2bn a year.

The FSA has pressed ahead with liquidity reform unilaterally to get on
top of the problem early. However, banks have warned that the cost of
tougher liquidity rules and tighter capital requirements will limit the
availability of credit for business, potentially threatening growth. In
its release yesterday, the FSA acknowledged the concerns.

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