| Videos | Channels | Search |
A puzzling time for banks
Barclays on Friday released GBP 5.8bn of new shares to protect itself from any future financial shocks.
It comes just days after the head of the UK body, set up to introduce reforms in the wake of the financial crisis, recommended all banks double their buffers, but Bill Blain from Mint Partners says this would be counter inuitive.
He says doubling their capital ratios would constrain their lending power, which could cause all kinds of supply side problems for companies looking to expand.
On the flip side Bill tells Saxo TV's Sara Walker it could mean we see many new lenders, lending to the corporate sector, eg growth in peer to peer lending; taking funding resonsibilty away from the banks and giving it to investors.
Bill also says Europe still has a lot to learn from the US banking industry.
The European sector still has many problems left over from the past 5 years, including the amount of funding they rely upon from the ECB and other central banks; problems in delveraging; assets that are overvalued on balance sheets.
Whereas in the US most of the problems that caused the crisis have now been solved. The banks are financing themselves, lending more and more and importantly financing the recovery in the property market.
01:33 minutes
Tags: assets, banking industry, banks, barclays, bill blain, buffers, capital ratios, central banks, corporate, deleveraging, ecb, european sector, expansion, financial, financial crisis, financial industry, financials, growth, investors, lending, lending power, mint partnes, overvalued, peer to peer, reforms, rights issue, sara walker, saxo bank, saxo tv, supply, supply side, tradingfoor.com, us property market, us recovery, vickers, video