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29 big banks given higher capital mandates

CANNES, France, Nov. 5 (UPI) -- Four banks from Britain, eight from Asia and 17 from Europe are on a list of banks requiring capital increases, the Group of 20 Nations said.

At the gathering of world leaders in Cannes, France, the list of banks provided by the Financial Stability Board was unveiled, The Daily Telegraph reported.

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The four British banks that made the list are Barclays, Royal Bank of Scotland, Lloyds Banking Group and HSBC.

The banks were deemed "too big to fail," meaning if one of them collapsed, given the reach of its financial impact in loans and investments, a domino effect would ensue, causing chaos throughout the world's financial system.

The FSB is requiring the 29 banks to raise extra capital to cushion against losses that would occur in an economic downturn. The formula for capital requirements includes five graduated levels of capital.

The banks all fall into the first four levels of required capital with a fifth level set with such a high requirement -- an extra 3.5 percent minimum capital ratio on top of the 7.5 percent already required -- that it is intended to deter these large banks from attempting to grow larger.

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The banks are not expected to meet the new requirements immediately. They will be phased in over a three-year period beginning in 2015, the newspaper said.

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