KPMG warns asset managers falling 'well short' of FCA's capital adequacy requirements

Increased focus on smaller firms

Investment firms have been told to hold an average of 82% additional capital on top of their own estimates following Financial Conduct Authority (FCA) visits over the past four years, KPMG research has revealed.

The group's report Picking up the Pace, released today, shows asset managers have been forced to cancel dividends, ask parent companies for cash injections and seen share prices tumble following an increased capital requirement. For a mid-sized UK firm, this 82% additional capital equates to around £31m. 'You can't live in Alice's Wonderland forever': Lessons learnt over the past decade and what could cause the next crisis As part of European regulatory requirements in response to the post-financial crisis Basel accords, asset managers - as well as other financial groups - must assess...