The most (popularly) insensitive quote of the year award goes to the FSA's liquidity manager, David Morgan. In a Friday speech on the FSA's new liquidity rules for banks, which will see them buying more government bonds, he said: Oct. 9 (Bloomberg) -- British banks may pass on more than 2 billion pounds ($3.2 billion) in fees to customers to make up for the costs of implementing tougher liquidity rules, a U.K. regulatory official said. Banks can charge retail and corporate customers higher rates and fees to maintain profit margins after implementing the rules, David Morgan, liquidity policy manager at the Financial Services Authority, said in London today. The cost to financial firms of using more expensive funding, such as government bonds, may reach 2.2 billion pounds a year under the proposals, according to FSA data. "This is not a cost to your shareholders in the long term, this is a cost to your customers," Morgan said in a speech. "You will pass these costs on to your customers." Thanks, FSA! Putting the idea in even starker perspective on Monday -- albeit with different numbers -- were UBS banking analysts Alastair Ryan and John-Paul Crutchley. They reckon the costs to bank customers of the new rules are equivalent to a 2p increase in the basic rate of UK tax:
The most (popularly) insensitive quote of the year award goes to the FSA's liquidity manager, David Morgan.
In a Friday speech on the FSA's new liquidity rules for banks, which will see them buying more government bonds, he said:
Oct. 9 (Bloomberg) -- British banks may pass on more than 2 billion pounds ($3.2 billion) in fees to customers to make up for the costs of implementing tougher liquidity rules, a U.K. regulatory official said.
Banks can charge retail and corporate customers higher rates and fees to maintain profit margins after implementing the rules, David Morgan, liquidity policy manager at the Financial Services Authority, said in London today. The cost to financial firms of using more expensive funding, such as government bonds, may reach 2.2 billion pounds a year under the proposals, according to FSA data.
"This is not a cost to your shareholders in the long term, this is a cost to your customers," Morgan said in a speech. "You will pass these costs on to your customers."
Thanks, FSA!
Putting the idea in even starker perspective on Monday -- albeit with different numbers -- were UBS banking analysts Alastair Ryan and John-Paul Crutchley.
They reckon the costs to bank customers of the new rules are equivalent to a 2p increase in the basic rate of UK tax:
ie, would you rather pay 2% per year or have massive bailouts every now and then? what's really more expensive to taxpayers? In the long run, we're all dead. John Maynard Keynes
I see future banking in terms of service provision, not credit intermediation. The only shareholder capital necessary would be that covering operating costs. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
