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kevinan108

HSBC chief to subject UK banking operation to performance tests | Business | The Guardian - 0 views

www.guardian.co.uk/...ng-operation-performance-tests

bank HSBC Guardian UK retail banking stresstest

shared by kevinan108 on 18 May 12 - No Cached
  • As he gave an update of the bank's strategy – which has led to 14,000 job cuts as he cuts costs to make the bank more efficient – Gulliver said the UK business would be subjected to his performance tests once it was known how the final details of the Independent Commission on Banking (ICB) were implemented.
  • Gulliver described the UK as essential for retail banking and he said on Thursday that the business was one of the best performing, describing it as a "home" market.
  • He is intending to achieve $3.5bn (£2bn) of savings within three years to bolster the bank's return on equity to 12-15%. It was 11% last year.
Kevin Mao

Banking rules may encourage riskier trading, warns ratings agency | Business | The Guar... - 0 views

www.guardian.co.uk/...ng-rules-riskier-trading-fitch

banking rules Shadow Regulations Changes

shared by Kevin Mao on 17 May 12 - No Cached
  • 29 biggest banks in the world could be encouraged to embark on riskier trading activities
  • The 29 banks are deemed to be global systemically important financial institutions
  • agency also warned that borrowing costs for customers could rise as banks try to maintain their profitability
  • ...7 more annotations...
  • might even be a shift to the capital markets to raise funds and banks could move into the less regulated areas of finance, known as "shadow banking"
  • Banks need to meet the new capital requirements, known as Basel III and being implemented as a result of the 2008 banking crisis, by the end of 2018,
  • The impact of holding extra capital – about 23% more than their current holding of $2.5tn – could reduce returns on equity to 8.5% from the 10.8% average of the 29 banks during the period 2005-2011
  • in an effort to entice investors the banks may be encouraged to take bigger risks
  • 29 banks will in total need to find $566bn on the assumption that these crucial banks need a 10% capital cushion
  • need for extra capital will reduce the return on equity
  • If the banks did not raise equity it would take them three years to raise the extra capital
  • Kevin Mao on 17 May 12
     
    This article is about new banking rules that may encourage riskier trading.
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