UK banks 'holding 800% more capital than pre-crisis'

22 October 2012

Banks in the UK now need to hold capital buffers some 800 per cent higher than before the global economic crisis, an official in the financial industry has stated.

Andrew Bailey, executive in charge of supervising banks for the Financial Services Authority (FSA), believes regulators are now taking a much more hands-on approach to help prevent any repeat of the banking collapse.

During an interview with the Financial Times, Mr Bailey explained that requiring banks to have significantly higher financial cushions to protect them against market shocks has made the industry safer.

He went on to note that this provides regulators such as the FSA with the scope to implement a range of new initiatives to boost lending to households and companies across Britain.

Mr Bailey added that ensuring bank bondholders take losses if the government has to assist a company financially represents an important step forward.

"The good thing is, having stared in the abyss ... it's a lot easier to be tough," he stated.

By Asim Shah

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