UK’s new watchdog tells banks to raise another $20 billion


Matt Scuffham and Huw Jones
Reuters
June 21, 2013

Britain’s banks will have to raise 13 billion pounds ($20.4 billion) of extra capital and meet a new cap on lending ahead of international peers as the Bank of England seeks to curb risk in the financial sector.

The combined balance sheet of Britain’s largest banks is five times the size of the economy, despite radical restructuring since the crash in 2008, and the country’s central bank fears some of them are still too big to fail.

Privately bankers complain that higher capital requirements and limits on leverage are hampering their ability to lend, but outgoing Bank of England governor Mervyn King told London’s financial elite this week it was wrong to blame higher capital levels for weak lending.

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