UK Commission On Banking report
The UK Commission on Banking will recommend the country’s largest banks will be required to hold core Tier 1 capital levels of about 10 %, the report falls short of a full break of up retail and investment banking. The commission will also call for Lloyds Banking Group Plc to sell more branches than planned, which will probably be reflected in their share price today. Currently these levels at between 4~8% depending on the lenders in question.
This could have two potential ramifications, firstly by requiring the banking sector to hold more tier 1 capital levels the most likely knee jerk reaction will be a reduction in lending and this is the last thing the UK economy needs, the second is the threat that the larger banks will relocate offshore with will mean a reduction in tax revenue and loss of further jobs.
