Arab Today, arab today hsbc seeks \ring fence\ for banks
Last Updated : GMT 08:53:10
Arab Today, arab today
Arab Today, arab today

HSBC seeks \'ring fence\' for banks

Arab Today, arab today

Arab Today, arab today HSBC seeks \'ring fence\' for banks

London - Arabstoday

HSBC wants all banking book assets to be included in a \"ring-fence\" that is proposed as a way to make the British banking system safer, representing a far bigger pool of protected assets than rivals want. HSBC said assets in the banking book, which are held to maturity, should be held within the ring-fence, which would mean mortgages, corporate loans and all long-term assets on the balance sheet protected by a government guarantee. Trading book assets, which are marked to market prices, would be kept outside the ring-fence, leaving banks to independently fund them via wholesale markets. \"Overall, the probable outcome under this regime would be separation closer to a Glass-Steagall type of basis,\" HSBC said in a written submission to lawmakers on Wednesday, referring to the US legislation of 1933 that split investment banking and commercial banking. \"This would have certain inefficiencies but would be much preferable to a structure that risked separating funding from lending.\" The bosses of Britain\'s top four banks on Wednesday gave contrasting views on what should go into a \"retail ring-fence\" proposal that is at the heart of a plan to shield savers and taxpayers from a repeat of the global financial crisis. Barclays and Royal Bank of Scotland favour a narrow definition of what is included, whereas HSBC and Lloyds support a bigger pool. RBS CEO Stephen Hester warned that creating too big \"a protected beast\" raised the risk of moral hazard. Barclays said a retail ring-fence \"could be a costly way of achieving what could otherwise be achieved [by other methods]\", but said some form of ring-fence was inevitable and \"there are ways to make it work\". What assets go into the ring-fence is the key issue banks are grappling with after an independent panel tasked with making the industry safer said it should be introduced. The ring-fence could cover over £2.5 trillion of assets, given the massive size of UK bank balance sheets, or maybe just a third of that, depending on what is included. The commission will finalise its plans in September. HSBC\'s main concern is to avoid a funding mis-match, whereby the ring-fence would be \"overfunded\" and not able to use extra deposits for a portfolio outside the ring-fence, which would have to be funded in wholesale markets. This risks a major dislocation in funding for corporate loans, it and Lloyds said. Unlike most rivals, HSBC has more deposits than loans. Its proposal would see the ring-fence contain both retail and corporate deposits and the corresponding loans, and is based on the IFRS 9 measurement of \"amortised cost\". The International Accounting Standards Board is still finalising its new IFRS 9 standard for measuring the value of assets like derivatives and bonds held by banks on their books. It sets out two ways for measuring value amortised cost and fair value. Assets that generate income, such as bonds, should be valued at amortised cost. Other assets, such as derivatives that are frequently traded, must be priced at the market price. From / Gulf News

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today hsbc seeks \ring fence\ for banks Arab Today, arab today hsbc seeks \ring fence\ for banks

 



Arab Today, arab today

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today hsbc seeks \ring fence\ for banks Arab Today, arab today hsbc seeks \ring fence\ for banks

 



Arab Today, arab today France defies terrorism through tourism

GMT 15:18 2017 Saturday ,20 May

France defies terrorism through tourism
Arab Today, arab today Zainab Fadel Oglu designs “Shakerin” mosque

GMT 12:13 2017 Thursday ,11 May

Zainab Fadel Oglu designs “Shakerin” mosque
View News in Arabic - Business: مصارف
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Mozambique's gas boom dream under threat

GMT 16:29 2017 Monday ,08 May

Mozambique's gas boom dream under threat
Arab Today, arab today Prepares to give stargazers an eyeful

GMT 13:38 2017 Monday ,06 March

Prepares to give stargazers an eyeful
Arab Today, arab today Jaguar displays XF Sportbrake line

GMT 14:36 2017 Monday ,08 May

Jaguar displays XF Sportbrake line
Arab Today, arab today BMW sees forecasts in reach

GMT 09:04 2017 Thursday ,04 May

BMW sees forecasts in reach
Arab Today, arab today Climate science: Bad news gets worse

GMT 08:48 2017 Saturday ,06 May

Climate science: Bad news gets worse
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday