Top British banks 'would fail safety tests'

Four British banks and 17 in total from the EuroZone would not pass a 'too-big-to-fail' test.

The Financial Stability Board identified 29 banks,including Royal Bank of Scotland, HSBC, Lloyds and Barclays, so important to the world's financial system that they require more capital and closer surveillance than rivals, plus a detailed plan to allow them to be wound up without taxpayer help if they hit trouble.

One of the things agreed at the G20 summit in Cannes was a core capital requirement surcharge starting at 1 percent of risk-weighted assets and rising to 2.5 percent for the biggest banks,which would be phased in over three years from 2016.

Banks likely to need a 2.5 percent capital surcharge are Citigroup, HSBC , JPMorgan, BNP Paribas and Royal Bank of Scotland , according to a preliminary assessment according to a bank industry source,whilst Bank of America , Barclays and Deutsche Bank will be in the 2 percent category.

The implications for the banks named are that they must carry out far-reaching changes to prove that they will not have to be supported by the state if they do near collapse.

Bad debts and sterling under pressure

Rather worrying news from the banks this morning as the level of debts written off because defaulting borrowers will never repay them shot up last year.

£4.12bn in credit card loans,and £984m in mortgages were written off last year as well as other loans of £4.2bn.

In total £9.3bn will be uncollected.

It hasn't been a good day for the banks with HSBC reporting a 24 per cent fall in pre-tax profit to $7.1bn for last year mainly down to loan write offs but these were mainly in the UK.

Just to put a cap on the financial news,sterling is under pressure mainly as a result of uncertainities as to who will win the next election.The pound is currently trading under $1.50 amid concerns over who will tackle the UK’s record budget deficit.