The FT reported HSBC’s Chairman as warning that this would constrain profitability and hamper lending quoting him as saying “It will be a near impossibility for the industry to expand business lending at the same time as increasing the amount of deposits deployed in government bonds”.
As with any new regulations, companies must ensure that they have the appropriate processes in place to minimise the effect that these have on the business, underpinned by controls and frameworks that ensure compliance, whilst maximising future opportunities.