Fractional reserve requirements

Our Ref: .ISS01129286 / PC65471

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Dear Sir / Madam

Thank you for your email dated 1 November 2009.

Your enquiry

You have asked the Financial Services Authority (FSA) what the fractional reserve requirements used in the banking system are, as a percentage.

Our response

The prudential requirements for a Bank or a Building Society are detailed in the FSA Handbook, within the GENPRU (General Prudential) and BIPRU (Prudential sourcebook for Banks, Building Societies and Investment Firms) sourcebooks. It is not possible to provide a figure to specifically answer your question; firms are able to satisfy our prudential rules using various methods of capital and calculation which would meet the requirements of the Banking Consolidation Directive.

I have attached a link for your information to GENPRU 2 (Capital) which details the capital resources tables for Banks and Building Societies:

http://fsahandbook.info/FSA/html/handboo...

Further information:

I have also attached a link to our liquidity pages, which includes details of our work on strengthening liquidity standards:

http://www.fsa.gov.uk/Pages/About/What/I...

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I trust this is of assistance.

Yours sincerely

Philip Bellars (Mr)
Customer Contact Centre
Financial Services Authority
Consumer Helpline: 0845 602 2185 (call rates may vary)
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