Norwegian banks will be overcapitalised and British banks undercapitalised under the new Basel rules.
So says research from Matrix Group, which considered the fate of European retail and corporate lending banks under the regulations.
The paper concludes that changes to bank capital under new Basel regulations will be a ‘game changer’ for the sector, and will “increase the quantum of capital in the system, improve its quality, force out complexity from balance sheets and ultimately drive down ROE”.
That seems to be a thumbs-up for the new rules, which are intended to create a safer system at the expense of shareholder return. But it’s not good news for Lloyds or HSBC, two of the three British banks studied. Read more