HSBC chairman wants delay to ringfence rules
BRITAIN’S biggest banks could face two expensive shake-ups instead of one, the head of HSBC has warned, because the new competition probe is taking place at the same time as banks divide themselves up with the incoming ringfence.
HSBC chairman Douglas Flint has written to chancellor George Osborne, asking him to push back the introduction of the ringfence from 2019. Flint fears that banks could waste time and money which would be better spent on customers or shareholders, or re-building capital buffers to protect against slumps.
Banks are splitting themselves into retail banking and investment banking arms under ringfence rules. The idea is that when a bank collapses, authorities can protect customers and small businesses in the retail bank, and close down the investment bank.
But, Sky News reported, Flint believes the bank will go through this expensive process only to be hit by another wave of reforms from the competition probe.
The Competition and Markets Authority (CMA) is investigating small business banking and the market in current accounts. It has a range of powers and could eventually recommend breaking up the biggest banks, or forcing them to change the way they offer these crucial services.
HSBC publishes its half-year results today and analysts expect it to take a hit because of PPI claims and a hefty fine from US regulators for violating money laundering rules and breaching sanctions.