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.
