Hastily introduced banking industry regulation risks precipitating a second credit crunch and throwing the world's financial system back into crisis, HSBC chief executive Michael Geoghegan has warned.
HSBC chief executive Michael Geoghegan warns hasty regulation could create second financial crisis, writes the Telegraph.
New rules requiring banks to hold larger capital reserves, along with regulation forcing financial firms to split their businesses up could have disastrous consequences for the global economy said Mr Geoghegan in a speech yesterday.
Speaking to an audience in New York, Mr Geoghegan said their needed to be wider recognition that the global economy was "still strained".
"This isn't banks whingeing," said Mr Geoghegan. "It's a real concern. What if we are right and it leads to further deleveraging? If it drives risk into unregulated parts of the system? And leads to regulatory arbitrage? These are all consequences banks and their regulators should want to avoid." FULL STORY...
Coalition Govt: British banks face break-up in just one year
Britain's giant lenders are facing the threat of extinction after the new coalition Government pledged to establish an independent commission to decide whether to break up the banks.
The commission was the centrepiece of the Conservative and Liberal Democrat agreement on banking reform, which included a pledge to introduce an extra tax on the industry and "robust action to tackle unacceptable bonuses", writes the Telegraph.
It has been given "an initial time frame of one year to report" on whether separating retail and investment banking will "reduce systemic risk".
Both parties have argued for a break-up, but the Tories want to limit the split to the "casino" activities of proprietary trading while the Lib Dems wish to go further and "separate low-risk deposit taking banking from high-risk investment banking". FULL STORY...
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