FSA tactics force nationalisation

Regulators' demands that Britain's banks are "bullet-proofed" against recession have forced them to go cap in hand to the taxpayer, banking sources have claimed. The Financial Services Authority has told Britain's banks that they must maintain a Tier 1 capital ratio – the key measure of a bank's financial strength – of more than 9pc. While the Treasury said this was already "well above international minimum standards", the FSA has in practice gone much further. In fraught negotiations over the weekend with Britain's bank chiefs, the FSA coerced them into taking a 'belt and braces' approach to capital requirements – a move some bankers believe was triggered by FSA concerns over continuing falls in bank share prices. The upshot is that banks have been required to raise more cash than was expected only last week when the... [read full story]