Blow to borrowers as banks are ordered to stockpile an extra £25billion to prepare for another financial crisis27/03/2013 19:57
Source: Daily Mail
Britain’s banks have been told to stockpile £25billions by the end of the year to prepare for future financial crises.
In a major blow to borrowers, the Bank of England warned banks they face a potential £50 billion hit over the next three years from eurozone shocks, bad debts and mis-selling scandals.
Leading high street chains are warned they must bolster their balance sheets to plug a hole in their capital reserves, in a move which critics warned will further limit lending to businesses and homebuyers.
The Bank of England warned lenders need to be better prepared for potential fines and future eurozone shocks
The Bank's Financial Policy Committee (FPC) revealed the scale of the balance sheet pressure in the banking industry as it set out how to tackle the collective capital shortfall.
It said regulators will order banks to fill the capital hole by the end of the year to withstand the expected strains on their balance sheets.
But the £25billion sum was lower than had been expected, and bank shares rallied as a result.