UK plans to make banks hold up to 10 billion pounds more capital

The Bank of England set out plans on Tuesday to require banks to hold a total of up to 10 billion pounds more capital as they start to lend more freely in a recovering economy, but stopped short of demanding immediate action.

The central bank said credit conditions in Britain had largely recovered from the financial crisis, and warned asset prices were vulnerable to a big rise in interest rates and emerging market risks, meaning banks needed an extra buffer.

“With today’s announcement, the basic amount of capital our system requires is settled,” said Bank of England (BoE) Governor Mark Carney, setting out plans for top UK banks including HSBC (>> HSBC Holdings plc), Lloyds (>> Lloyds Banking Group PLC), Barclays <BARC.L and RBS (>> Royal Bank of Scotland Group plc).

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