Commenting on today’s FPC reappointment hearings, the Chairman of the Treasury Select Committee, Andrew Tyrie MP, said:
"Both Donald Kohn and Andy Haldane today made clear that they think the FPC should be given the power to set the leverage ratio without much further delay. It is also clear that they feel it should be higher than 3% in the future.
Their positions are consistent with previous, specific recommendations of the Banking Commission on the leverage ratio.
Mr Haldane told us that ‘a 33 times leveraged banking system sends shivers down my spine, if it were to be a long-run goal for financial stability’.
The Treasury’s rearguard action to cling to control of the leverage ratio needs to end. The Government should accept the Banking Commission’s recommendations without further delay and grant the FPC this power."