Lord Turner: Basel III does not go far enough

FSA chairman Lord Turner last night said the amount of high quality capital banks should hold as a risk buffer should be double the current requirement.

In a speech to the Cass Business School, Turner called for capital requirements to be set higher than the 7% proposed under Basel III. The peer backed the ideas put forward by Monetary Policy Committee member Professor David Miles to set equity capital requirements instead at between 15% and 20% of risk weighted assets. He says: "In an ideal world equity capital requirements would be set much higher. "Today's regulators are the inheritors of a half century-long policy error, in which we have allowed private sector banks to pursue their private interest in maximising leverage levels...