Bank of England hits back at Vickers criticism

Bank-of-England-Building-BoE-Bus-700x450.jpgThe Bank of England says it has not gone soft on banks, hitting back at criticism from Sir John Vickers.

A statement from the Bank, seen by the Financial Times, denies that it did not implement the full recommendations from Vickers’ Independent Commission on Banking (ICB) report on minimum capital to be held by the UK’s largest bank.

“The Bank of England continues to support the conclusions of the ICB but is proposing a higher level of capital and overall resilience in the banking system than was proposed by the ICB in their final report,” the BoE said.

“On a comparable basis, globally systemic banks in the UK will be required to have 10 times more capital than before the crisis.”

Speaking yesterday, Vickers said the Bank of England’s new proposal for the largest six banks to hold 2.5 per cent in addition to the value of loans, while the smaller lends can hold just 1 per cent was weaker than the ICB’s suggestions.

“The Bank of England proposal is less strong than what the ICB recommended,” Vickers said.

In its final report in 2011 the commission recommended the six largest banks should each have a capital buffer of 3 per cent.