Banking

House of Lords written question – answered on 13th February 2012.

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Photo of Lord Myners Lord Myners Labour

To ask Her Majesty's Government what assessment they have made of the zero risk assumption applied to sovereign government debt under the Basle Committee rules for bank capital risk weighting, and of the impact of this on lending to small and medium-sized enterprises.

To ask Her Majesty's Government what assessment they have made of whether the current approach to risk weighting capital for banks encourages lending to (1) commercial property, and (2) small and medium-sized enterprises.

Photo of Lord Sassoon Lord Sassoon The Commercial Secretary to the Treasury

The risk weights for banks are determined by international standards agreed by the Basel Committee on Banking Supervision. These standards are incorporated in European Union legislation. The Bank of England and the Financial Services Authority keep all international standards under review within the global framework.

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