There\’s something tickling around at the back of my mind on this.
They must also be forced to maintain healthy ratios of capital to debt – storing cash during a boom so they can lend in a downturn.
Didn\’t Gordon Brown change the tax rules at one point? I\’m sorta certain that there was some change that made it less likely that banks would write off debts against profits, the effect of which was to reduce the reserves that they built up in good times.
The aim was, I think, to stop them "dodging" corporation tax by taking the hit against their reported profits for tax.
Anyone actually know?