The global banking system has been shaken by talk of possible defaults and contagion but managers are divided about whether this has opened up opportunities in the sector.
Share prices can double Richard Buxton, head of UK equities, Schroders Yes. Higher levels of equity capital, loss absorbing debt, and resolution and recovery plans that allow banks to fail in an orderly manner (protecting retail deposits) are absolutely necessary for UK banks. Such measures are already being put in place and will provide sufficient balance sheet strength for banks in highly stressed scenarios. In September, the Independent Commission on Banking (ICB) proposed ‘ring-fencing' as an additional measure. We believe this is not only unnecessary, but actually significant...
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