UK Banks hit hardest in worldwide banking shakeup
JP Morgan, the respected research and investment giant, has today issued a report suggesting that the cost of bank in the UK is set to soar in the short term. New capital adequacy regulations as well as ever increasing taxes aimed at the financial sector mean that the global financial industry will need to raise in the region of $221 billion to meet these new liabilities. Of the $221 billion in question it is believed that UK banks will need to raise in the region of $91 billion.
As you might expect, the likes of Royal Bank of Scotland and Lloyds Bank appear to be most at risk in the UK with a the need to raise $35.3 billion and $23.4 billion respectively. This will have a massive impact on the cost of banking in the UK as many of these costs will at some point be transferred to banking customers. There is also concern that investor appetite for new issues and fundraisings has all but evaporated over the last few weeks and Royal Bank of Scotland and Lloyds Bank in particular could pay the price for an increase in the cost of finance.
There are also growing concerns that any increased liabilities for the worldwide financial sector will cause a significant "drag" on the worldwide economic upturn which could have further ramifications for individual economies around the world.
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