Hester: Banks to impose strict self limits on capital

ROYAL Bank of Scotland chief executive Stephen Hester yesterday signalled his faith in the banking sector to act prudently in setting rigorous capital standards for itself above and beyond the scope of regulatory requirements.

Hester, speaking yesterday at a conference organised by Bank of America Merrill Lynch, said he was not expecting a “one-off golden pot” to emerge from the banking industry as organisations release capital right down to the bare minimum set by regulators and leverage up as far as possible.

“I think that’s unlikely,” Hester said. “It’s certainly unlikely from an RBS standpoint.”

The RBS boss added that he believed current changes to regulation are falling in “sensible territory”.

“The extremes are being cut off,” he said.