FSA relaxes capital rules for lending

Earlier in the month, the Financial Services Authority relaxed capital and liquidity rules – risky business, or a surefire way for growth?

Earlier in the month, the Financial Services Authority relaxed liquidity and capital rules for banks, in a bid to help stimulate lending in the sluggish economic climate in the UK.

While these new policies had been established earlier in September, there has been some brouhaha in response to what some see as mixed messages from regulators, as well as calls for more capital to be extended to banks.

Financial commentator Ian Fraser sees these changes in capital rules as being a massive u-turn for the FSA, and believes that the FSA is playing a dangerous game by relaxing these rules.

“In broad terms, the moves seem a massive u-turn for the regulator, chaired since 2008 by Lord Turner” Mr. Fraser said, in regards to these capital changes.

“Until now, all the talk from the Bank of England in Threadneedle Street and the FSA in Docklands has been that banks must further bolster their capital ratios — especially in view of the risk of a disintegration of the eurozone.”

The impact of these regulatory changes will not be seen until after the new year. By then, it will be evident if the FSA has succeeded in stimulating consumer spending and business growth, by allowing lenders flexibility in the amount of capital they’re required to hold.

How do you feel these changes will affect the economic climate come the new year?
Join the discussion on LinkedIn.

More financial regulation hot topics:

 

Register for Updates

Register to receive news updates straight to your inbox.
  • We will only send you marketing information using the details you have provided to deliver, develop and promote our products and services if you give us consent to do so. Please use the options below to indicate if you consent to us using your information for this purpose. For further information please read our privacy notice.
  • This field is for validation purposes and should be left unchanged.

Newsletter

Sign up to our newsletter
  • We will only send you marketing information using the details you have provided to deliver, develop and promote our products and services if you give us consent to do so. Please use the options below to indicate if you consent to us using your information for this purpose. For further information please read our privacy notice.
  • This field is for validation purposes and should be left unchanged.

Technology Form

  • We will only send you marketing information using the details you have provided to deliver, develop and promote our products and services if you give us consent to do so. Please use the options below to indicate if you consent to us using your information for this purpose. For further information please read our privacy notice.

Get in touch with us

We're ready to show you the future of consulting. Just fill out the form below!
  • We will only send you marketing information using the details you have provided to deliver, develop and promote our products and services if you give us consent to do so. Please use the options below to indicate if you consent to us using your information for this purpose. For further information please read our privacy notice.

PPI Case Handler Profile

Complete your details below to receive our PPI Case Handler profile.
  • We will only send you marketing information using the details you have provided to deliver, develop and promote our products and services if you give us consent to do so. Please use the options below to indicate if you consent to us using your information for this purpose. For further information please read our privacy notice.
  • This field is for validation purposes and should be left unchanged.

Subject Access Request

    We require basic personal details to locate you on our records.

Request to Delete your Personal Data

    We require basic personal details to locate you on our records so we can delete your information.

Request to Withdraw Opt-In

    We require basic personal details to locate you on our records.