UK banks being dishonest on opposing tougher capital rules: Jenkins
23 November 2011
According to Robert Jenkins, a member of the Bank of England's Financial Policy Committee (FPC), it was ''dishonest'' of banks to argue that implementing tougher capital rules too quickly might harm the economy.
Jenkins said in London late yesterday that the latest lobby tactic was to convince commentators, the public and politicians that encouraging prudence too soon would hit the economy too hard, according to the text of his remarks issued by the central bank.
''This is no longer amusing. This strategy is intellectually dishonest and potentially damaging.''
Meanwhile, the interim FPC, set up by the government to take over banking regulation, is to meet in London today to discuss ways to strengthen the financial system.
According to Jenkins lobbying by the financial industry led to ''watered down'' Basel capital rules, and that any moves to abandon them would further erode confidence in banks.
He said the real truth was that banks could strengthen their balance sheets without harming the economy and they could do so by cutting bonuses, cutting intra-financial risk-taking and by raising term debt and equity.