Ringfencing rules will lead to increased reliance on secured funding, says Fitch

22 Sep 2011

Fitch said on Wednesday that proposed UK ringfencing rules would push banks to rely more on secured funding — and that senior unsecured would comprise a permanently lowered proportion of bank funding.

"The introduction of depositor preference for ringfenced banks will also play a big role in changing the funding mix," said Gerry Rawcliffe of Fitch’s FIG group. "Effective subordination for senior unsecured creditors will push banks towards doing as much secured funding as they are allowed."

Fitch’s argued that ringfencing ...

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