Bank of England eases capital requirement to support the credit market

BoE’s Financial Policy Committee said it would reverse a decision it took in March to increase the amount of capital banks must hold against cyclical upturns in the credit cycle.

Holding the so-called counter-cyclical capital buffer (CCB) at zero until at least June 2017 would reduce banks’ capital requirements by 5.7 billion pounds, potentially freeing up an extra 150 billion pounds for lending, the BoE said. The BOE’s Financial Policy Committee said it agreed to lower capital requirements for U.K. banks in a move that should allow them to lend an extra £150 billion ($199 billion) to U.K. businesses and households to keep the economy flush with credit.

Finance minister Osborne told parliament he planned to meet the chief executives of Britain’s biggest banks on Tuesday to discuss future action.

The FPC stands ready to take actions that will ensure that capital and liquidity buffers can be drawn on as needed, to support the supply of credit and in support of market functioning.BOE

The author: Clémentine FORISSIER

Clémentine Forissier, a youthful journalist hailing from Brussels, has been making waves in the field of media. Despite her relatively young age, she has quickly risen to prominence as a prominent voice in Belgian journalism. Known for her fresh perspective and dynamic reporting, Clémentine has become a recognized figure in the Brussels media scene, offering insightful coverage of various topics.

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