Barclays and Nationwide, which have both increased their net lending to the economy this year, are facing the threat of being forced to raise more capital or sell off loans to meet a new “leverage ratio” target.
For Barclays the impact of the surprise measure, were the bank to have to meet the 3pc ratio by the end of the year, would to force it to raise as much as £8bn in fresh equity or shrink its assets by £280bn, according to analysts at Nomura.
Schizophrenia in banking regulation.
Yes, we\’d like you to lend more. Which is great, just fine.
Oh, by the way, we\’re also going to force you to hold more capital against your extant loan book. Which is fine, just fine.
But it\’s damned difficult to do both at the same time.
Have we ever had a period of joined up government?