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Capital One: banking on banking

Peter Schnall, chief risk officer of Capital One, talks to Mark Pengelly about the bank's acquisition of ING Direct in the US and the importance of retail funding

Peter Schnall

If Basel III works as intended, tomorrow’s banks will be far more resilient to the kind of liquidity squeeze that drove Northern Rock into the arms of the UK government at the start of the financial crisis. The new rules compel lenders to decrease their use of volatile, wholesale financing in favour of more stable funding sources, such as retail and corporate deposits. However, not everyone needed a crisis to recognise the danger.

“We figured out fairly early that the wholesale funding model for

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