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The Credit Cruncher was conceived to help you to keep up to date with credit crunch and recession developments, it provides some helpful credit crunch advice and it addresses personal debt. The Credit Cruncher also seeks to explain how the credit crunch started and shed some light on the worldwide recession. Recently, we have begun to look at how BREXIT will affect the UK economy. Please feel free to leave comments where relevant.

5 Oct 2009

New Banking rules to be phased in...

The FSA (financial services authority) is to give banks time to phase in alignment with the new rules on liquidity. The upshot of the new rules is that banks will be required to hold a better equity-to-risk ratio, however time is being given so that banks are not prevented from lending to aid the long-awaited economic recovery. After the concerns following the Icelandic banks collapse, the new rules will apply to foreign banks that have branches in Britain.
In tandem with the new rulings, the Bank of England will be expanding deposit facilities to smaller banks, thus preventing the need for smaller banks to keep deposits with larger commercial banks who themselves may suffer at the hands of a future financial breakdown. The smaller banks have been dependent on commercial banks for liquidity, in future they will be able to access funds directly from the BoE.

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