Money Marketing – 5 January 2010 | By Lee Jones
Barclays Capital has argued against shrinking banks that have been deemed ‘too big to fail’.
In a report examining the largest European banks, Barcap says that bigger banks are more profitable and less vulnerable than smaller banks, suggesting the regulatory focus should be on making big banks safer rather than smaller.
It argues that banks should hold more liquid assets and capital as well as create plans for a “controlled failure” rather than be broken up and shrunk.
The report, by Barcap analysts Simon Samuels and Mike Harrison, says: “There was hardly a detectable size-related pattern to the banks that ‘failed’ in this crisis. Universal and narrow banks, large and small banks all ended up being rescued by either their governments or their competitors.”
Full article: http://www.moneymarketing.co.uk/1004455.article?cmpid=MME01&cmptype=newsletter
