What can be done to seal the cracks in the lending landscape? bit.ly/1tmYljj It is a time of clichés for banks as they currently find themselves caught in a Catch-22, stuck between a rock and a hard place. In the UK, government initiatives such as ‘Project Merlin’ have been put in place to encourage banks to lend more freely. At the same time, new regulations or initiatives such as Basel III, Recovery and Resolution plans and leverage limits are coming to the fore, increasing the capital adequacy and liquidity requirements for banks around the world. So how do banks walk the fine line between lending requirements, managing risk and capital adequacy? Financial institutions are being asked to lend more therefore exposing themselves to additional risk and at the same time hold more capital which can reduce returns on equity. One consequence will be the need to make returns on lending by the way of fees and charges, as banks look at other ways in which they can optimize capital. A recent Capco/Swiss Finance Institute survey of the private banking industry found that 52% of firms plan to adjust their pricing strategies to share increased overheads with their clients. What are your thoughts on this topic?
Posted on: Fri, 21 Nov 2014 02:26:26 +0000
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