Safer banks ‘mean Britain pays more to borrow’
Rules brought in after financial crisis hobble the financial markets and increase bond yields, say traders
Obviously. If banks must hold more capital against any particular position then interest rates will be higher because banks must hold more capital against any particular position.
There are no solutions, only trade offs.
What the hell else did anyone think was going to happen? And why does anyone think that the system required zero capital to be held against government bonds before the crash? If it wasn’t to reduce the interest that governments must pay for borrowing that is?