What do the banks’ target returns on equity tell us? | Martin Wolf's Exchange | Economic commentary from the Financial Times – FT.com

What do the banks’ target returns on equity tell us? | Martin Wolf's Exchange | Economic commentary from the Financial Times – FT.com: According to a FT article last week, Lloyds’ bank has a target return on equity of 14.5 per cent. Banks like to argue that this is the level of return on equity they need to earn, in order to gain funding from the markets. Naturally, remuneration is linked to achieving such objectives. The question, however, is whether such objectives make any sense. The brief answer is: no.