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HSBC May Save $1.5 Billion on Loss-Absorbing Capital Requirement

HSBC Holdings Plc, Europe’s largest bank by market value, may escape $1.5 billion of additional costs after the government diluted plans requiring British lenders to raise extra loss-absorbing capital.

Chancellor of the Exchequer George Osborne said yesterday banks must sell securities capable of absorbing the equivalent of a minimum of 17 percent of risk-weighted assets worldwide, backing the recommendations of the Independent Commission on Banking. Osborne said the rule would apply to U.K. assets and to non-U.K. assets except where banks “can demonstrate they do not pose a threat to U.K. taxpayers.”