We develop an impact assessment of the banking reform bill recently proposed by the UK Government. The bill implements some of the recommendations put forward by the Independent Commission on Banking chaired by Sir John Vickers. The main purposes of the banking reform is to make banks more able to absorb losses in order to reduce the potential cost for the public, and to curb the incentives for excessive risk taking. The HM Treasury (2012b) estimates that the proposed reforms will require an increase for equity capital in the industry of roughly £19 billion. Using data made available by the HM Treasury (2012a, b) on private and social cost and benefit of the reform, as well as by The Bank of England (2012) on banks’ balance sheet, we compare the proposed reform with alternative hypotheses of lower and higher capital requirements.
Reforming the banks in the UK. An impact assessment of the draft Bill and alternative capital requirements.
DE FEO, GIUSEPPE;
2012-01-01
Abstract
We develop an impact assessment of the banking reform bill recently proposed by the UK Government. The bill implements some of the recommendations put forward by the Independent Commission on Banking chaired by Sir John Vickers. The main purposes of the banking reform is to make banks more able to absorb losses in order to reduce the potential cost for the public, and to curb the incentives for excessive risk taking. The HM Treasury (2012b) estimates that the proposed reforms will require an increase for equity capital in the industry of roughly £19 billion. Using data made available by the HM Treasury (2012a, b) on private and social cost and benefit of the reform, as well as by The Bank of England (2012) on banks’ balance sheet, we compare the proposed reform with alternative hypotheses of lower and higher capital requirements.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
