Banks will be made more liquid and less leveraged - FSA

Firms will be forced to hold higher levels of liquid assets than before the crisis to counter "painfully obvious inadequacies" in financial institutions' management of liquidity. However, Dewer says changes to required liquidity levels would be brought in gradually so as not to destabilise economic recovery "We are looking for our new regime to produce a significant further strengthening over coming years. In the long term, the system certainly needs to become more liquid and so less leveraged. "There will be no more ‘heads the banks win, tails society loses," says Dewer. "Alth...