The Bank of England has set out plans to require banks to hold a total of up to 10 billion pounds ($15 billion) more capital as they start to lend more freely in a recovering economy. But as Grace Pascoe reports, it stopped short of demanding immediate action.
The fog's almost cleared following the UK's financial crisis. That's according to the Bank of England. It says credit conditions in Britain have largely recovered since the fall. UK banks may have to hold a total of up to 10 billion pounds, that's $15 billion dollars more capital. Its Governor Mark Carney. (SOUNDBITE) (English) BANK OF ENGLAND GOVERNOR, MARK CARNEY, SAYING: "Like other buffers the counter cyclical buffer is there to absorb losses in stress enabling banks to continue to support the real economy and to avoid amplifying any shocks." Annual 'stress test' results into how Britain's big seven lenders would deal with unexpected economic shocks were also revealed. With RBS and Standard Chartered only passing after taking remedial action. Justin Urquhart Stewart is from Seven Investment Management. (SOUNDBITE) (English) SEVEN INVESTMENT MANAGEMENT, HEAD OF CORPORATE DEVELOPMENT, JUSTIN URQUHART STEWART, SAYING: "That always makes people very comfortable because you have been to the doctor for a check-up beforehand, but the trouble is the stress tests tend to test you for the things that have already happened, not necessarily for the things that haven't happened and particularly those things you don't know about yet which is obviously impossible to test for." Britain's rapidly growing buy-to-let mortgage sector was another key issue raised by the central bank It's keeping a close eye on the sector as it's feared borrowers could be vulnerable to a rise in interest rates.