Harvey: Basel capital cushion for banks not broad enough

Cazenove head of credit and Strategic Bond manager believes Basel III Committee's capital buffer requirements for banks did not go far enough

The capital buffer requirements for banks ironed out last week by the Basel III Committee did not go quite far enough, says Peter Harvey, Cazenove’s head of credit. Harvey awaited the Committee’s report with interest, as 20% of his Strategic Bond fund is in bank debt. He broadly welcomed the regulations, which he says “will make the banking system safer, and give a fatter cushion of capital”, but says he would like to have seen a higher minimum ratio of closer to 10%. Yields on lower tier 2 bank bonds, in which Strategic Bond has 10% of its assets, contracted by 0.2% following the ...