Lord Turner flags tighter capital rules

Banks that are "too big to fail" may need stricter capital requirements than smaller financial institutions, which pose less of threat to the financial system if they collapse, according to the head of Britain's financial regulator. Speaking in Tokyo yesterday, Lord Turner, chairman of the Financial Services Authority, said he was broadly in favour of proposals by the European Union to tighten supervision. "We may need higher capital requirements for our largest banks, precisely to reflect the fact that if they ever do get into trouble they will be too big to fail and we will have to rescue them," Lord Turner said. His comments follow remarks by Mervyn King, the Governor of the Bank of England, who said at his annual Mansion House speech that banks should not be allowed to grow so large that they could threaten the wider... [read full story]                    

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