Group items tagged

three-pronged reform agenda

capital plan

capital holes

it would be somewhere between €100bn ($137bn) and €200bn.

the plan needs to change

forced to meet the planned 9 per cent core tier one capital ratio in such a short time

determined not to raise fresh money – either from shareholders, because equity prices are so disastrously low, or from the state, because of an understandable fear of being stigmatised as a bailed-out bank that is weaker than its rivals

they would shrink their balance sheets, reducing the risk-weighted assets (or lending commitments) that form the denominator of their capital ratios, rather than boosting the capital that forms the numerator.

shrinkage of available bank credit across Europe

protesting about the lack of funding.

politicians and small business

the banks are bluffing

There is a strong reason to call their bluff

second prong

that will not be enough

normalise banks’ access to liquid funds in the bond markets.

Dexia,

often not insufficient capital that kills a bank (Dexia’s ratios were top-notch) but a lack of liquidity

short-term funding and long-term lending commitments proved fatal.

International regulators

come up with a new measure

the net stable funding ratio

will limit profitability and the banks have protested. But it should happen.

there needs to be a quick fix, too

there has been no issuance of bank bonds

Only with a temporary guarantee from a European Union vehicle can bond markets be reopened.

policymakers need to tackle the root cause of the problems in the periphery – namely, their budgetary mismanagement.

Silvio Berlusconi

must be ousted by the Italian people

entirely within the gift of those preparing for the weekend summit.

first two reforms

brave political calls, laying policymakers open to accusations of handing money to bankers again

the lesser of two evils

accompanied by an enforceable regime of business lending commitments

normal rules of capitalism have already been suspended. We should stop pretending otherwise and make the necessary intervention quickly and decisively

the Treasury fear the banks have a supportive ear in Downing Street in the shape of Jeremy Heywood, No 10 permanent secretary and a former Morgan Stanley managing director,

The separation of high street banking and riskier investment banking operations is the centrepiece of the Vickers package.

the government is considering calls for new governance safeguards at the Bank even as it gets new powers.

had regulators focused on the big picture rather than box ticking they might have prevented the disastrous merger of Royal Bank of Scotland with ABN Amro.

There was no shortage of laws – there was a lack of judgment,

the creation of a Financial Policy Committee at the Bank to spot danger building in the system was breaking new ground; he also conceded that the regulators had to strike a trade-off between risk and economic growth. “We don’t want the financial stability of the graveyard,”

Mr Osborne was giving evidence to MPs about the future shape of Britain’s financial architecture and specifically on the draft financial services bill, which will put the Bank of England in charge of spotting future crises.

recommended replacing the Court of the Bank with a stronger supervisory body that could review interest rates and other decisions after the fact.