BusinessCorporate FinanceFSA liquidity rule poses $5bn slug on bank revenue

FSA liquidity rule poses $5bn slug on bank revenue

Financial institutions face an immidiate revenue slug of up to £5bn under far-reaching changes to Britain's liquidity rules proposed by FSA

Banks and other lenders face an immediate impact of up to a £5bn drop in
revenue as a result of having to hold more sterling gilts or OECD government
bonds than previously under ‘far-reaching and robust changes’ to Britain’s
liquidity regime proposed by the
Financial
Services Authority
(FSA).

However, in a consultation paper released yesterday, the FSA said it expected
the loss in revenue to be offset by possibly bigger benefits to the lenders from
healthier balance sheets, lower losses and a reduction in funding costs.

Companies who have to adhere to the new liquidity rules also face between
£150m and £200m in other costs for training, reporting and information
technology, while the FSA itself will carry costs between £11m and £14m linked
to the new rules.

Andrew Strange, AIFA
director of policy, told the Financial Times that, although he fully
understood the need to review the requirements in the current economic climate,
the proposed increase could pose serious risks to IFA businesses already having
difficulties.

Further reading:

Read
the Financial Times story

Related Articles

Grant Thornton recruits new corporate finance partner

Accounting Firms Grant Thornton recruits new corporate finance partner

10m Emma Smith, Managing Editor
Total fraud value at £2bn five-year high, finds BDO

Accounting Firms Total fraud value at £2bn five-year high, finds BDO

11m Stephanie Wix, Writer
MHA MacIntyre Hudson appoints corporate finance director

Accounting Firms MHA MacIntyre Hudson appoints corporate finance director

11m Stephanie Wix, Writer
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
KPMG announces senior partner promotion in Newcastle

Accounting Firms KPMG announces senior partner promotion in Newcastle

11m Stephanie Wix, Writer
Independent city firm reports 70% growth

Accounting Firms Independent city firm reports 70% growth

11m Stephanie Wix, Writer
Tax avoidance crackdown sees 80% jump in additional HMRC revenue

Accounting Firms Tax avoidance crackdown sees 80% jump in additional HMRC revenue

11m Stephanie Wix, Writer
Making Tax Digital: the "unexpected item in the bagging area"

Accounting Standards Making Tax Digital: the "unexpected item in the bagging area"

11m Stephanie Wix, Writer