Reform ‘will lead to higher rates’

The global move to increased financial regulation will result in a higher cost of lending for the banks.

Lending rates among European banks will rise by an average of 0.17%, in the US by 0.26% and in Japan by 0.08%, according to a new study by the IMF.

“Financial reform comes at a price. Higher safety margins, particularly in terms of greater capital and liquidity, do add operating costs for lenders. These costs will be passed on, at least partially, to the wider economy,” said the IMF in a statement.