The Basel committee says banks have been thrown a bone in the form of 4 more years and greater flexibility to build up cash buffers so they can use some of their reserves to help struggling economies. Richard Hunter of Hargreaves Lansdown says banks like Barclays could be an interesting investment this year, depending on risk appetite.

SHOWS: LONDON, ENGLAND, UK (JANUARY 7, 2012) (REUTERS - ACCESS ALL)

1. HARGREAVES LANSDOWN HEAD OF GLOBAL EQUITIES, RICHARD HUNTER, SAYING:

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(QUESTION: This is Reuters Today. We begin though with news of a Basel boost for banks. Global regulators have thrown them a bone on Draconian new liquidity rules, sparking relief among bankers. They'll now have four more years and greater flexibility to build up cash buffers. The hope is this will free up reserves to help struggling economies grow. New rules will now be phased in from 2015 and the range of assets banks can use as a buffer will now include shares, retail mortgage-backed securities as well as lower-rated company bonds. Let's talk with Richard Hunter from Hargreaves Lansdown about this and other bits and pieces. Good morning to you, Richard. A victory it seems for the banks. Does it change your investment strategy in financials?)
Well it removes one of the concerns that had been overhanging the banks in terms of the general regulatory concerns. These new moves certainly seemed to be slightly less onerous than had been feared. And as you rightly say, of course, 2019 rather than 2015 is now the ultimate end date. It's also fair to say, of course, that there are other regulatory concerns which still remind the likes of the LIBOR scandal which hasn't been bottomed yet. We know about PPI interest rate swaps et cetera, et cetera. Nonetheless, it's a standalone piece of news, I'm sure it will be taken positively.
(QUESTION: So you stay away from the banks?)
I think it very much depends on the attitude to risk. It's fair to say that far from being the stable middle-of-the-road investments they used to be, they're certainly now towards the higher end of the risk spectrum. The likes of Barclays, for example, could be an interesting play this year, not least of which because of the eagerly anticipated announcement of its annual results in February as to what it's going to do with regard to the investment bank as compared to the retail bank. So depending on your stomach for risk, the banks could be in an interesting position, particularly the likes of HSBC, for example, with its general financial strength and global presence.
(QUESTION: Of course, the big retailers in the UK reporting this week. Morrisons already out this morning, look pretty bad. What do you think the general state's going to be?)
I think Morrisons was expected to look bad. If you look at the market consensus, it's a sell. Sainsbury's and Tesco later in the week, coming in at a hold in the stronghold respectively, slightly ironic that the stronghold for Tesco should put it as the preferred play in the sector at this particular moment in time. Obviously quite apart from Asda, you've got the likes of Lidl and Aldi making things increasingly difficult on the pricing front. We're also expecting numbers in terms of the wider retailing sector from the likes of Debenhams and Marks & Spencer this week. And if you couple that with some retail sales figures for December from the British Retail Consortium tomorrow, clearly we're going to have a much better picture by the end of the week just how Christmas went.'