THE SYSTEMIC RISK BUFFER FOR UK BANKS: A RESPONSE TO THE BANK OF ENGLAND’S CONSULTATION PAPER

Journal of Financial Regulation, p. 264-282.

 

John Vickers

The article responds to the Bank of England’s (BoE) consultation paper of January 2016 on the systemic risk buffer for UK ring-fenced banks. It argues that, contrary to its proposed policy, the BoE should apply the highest permitted buffer rate—3 per cent of risk-weighted assets of common equity—to all large ring-fenced banks. The BoE’s reasons for lowering its estimate of optimal equity capital requirements are assessed critically.

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Journal of Financial Regulation