June 30, 2009

Government plans to tighten up regulation of the banking industry threaten to hamstring the sector and further add to the UK's lending woes, the British Bankers' Association (BBA) has warned.Angela Knight, chief executive of the BBA, said at the group's annual conference in London that the impact of current swingeing changes to bank oversight had not been adequately thought through.

She called for the "right balance" in new rules for the industry, but admitted that "mistakes have been made" by banks in the UK and worldwide."There is a danger that an over-layering of multiple capital measures could result in undue constraint on the ability of banks to support households and firms lending," said Mrs Knight.