Will the new capital requirements for banks really work?

With banks having to abide by new capital requirements, future bailouts will still see the UK taxpayer pay out for corporate mistakes according to Kames Capital's Gregory Turnbull-Schwartz.

The FT recently quoted figures of up to €1.1trn required to meet a new rule requiring banks to raise their levels of Total Loss Absorbing Capital (TLAC). The stated goal is to end taxpayer bailout of banks by making it clear that investors will take losses in future.   The idea has been well thrashed about over the past year or so and the magnitude will not be a shock to anyone following the bank debt markets. It has been accepted that increasing the amount of sub debt relative to total assets will make it less likely that banks may require bail in from taxpayers, and that the bondholder...