Bank capital: arm and leg

George Hay Subsidiarised banks are flavour of the month. It has not escaped the notice of global regulators that banks which individually capitalise each national subsidiary, like HSBC and Santander , did a much better job of retaining investor confidence during the crisis. But the model looks expensive to replicate. Regulators like the idea of organising banks into free-standing subsidiaries because it helps deal with the danger that they are too big to fail. If firms have local capital, indi...