Regulators worry about bank deleveraging

Officials would "very much prefer" industry to raise capital instead

Sylvie Matherat

Regulators and policymakers are keeping a close eye on the extent to which banks shrink their lending businesses as the industry tries to comply with new prudential rules - and are hoping capital-raising plays a bigger part in the process than deleveraging, according to Sylvie Matherat, deputy director-general of the Banque de France and chair of the liquidity working group at the Basel Committee on Banking Supervision.

"What we don't like to see is too much deleveraging. Clearly there are two

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