Feb 24 Bank of England Governor Mark Carney
dismissed banks' concerns about new capital requirement
proposals and said they have to stop refusing to follow new
international rules, in an interview published on Monday in the
Sydney Morning Herald.
Carney rejected claims by banks that proposed standards
being discussed by G20 members in Sydney were so strict that
they could lead to an explosion in shadow banking and sow the
seeds of the next crisis. ()
"Banks went into the financial crisis carrying de minimis
levels of capital - for example, less than 2 percentage points
relative to their risk-weighted assets, let alone their actual
assets. They carried basically no liquidity protection and they
were reliant on the state to insure," he told a reporter for
Fairfax Media on the sidelines of the Sydney G20 meetings.
"The consequence was that we had a crisis where even
countries that did the right thing in advance, such as my native
Canada and here in Australia, had to take extraordinary measures
to support the banks," Carney said.
He also said that Britain has made it through the easy phase
"Now it becomes a question of what will we do and how and
under what criteria as the economy continues to recover," Carney
said defending his forward guidance policy on interest rates.