Bank of England financial stability report finds UK banks' capital ratios may be overstated
Mervyn King, Bank of England governor, feels that future credit losses may be understated, costs arising from past failures may not be fully recognised, and risk weights used to calculate banks' capital ratios may be too optimistic.
Since we met in the summer, sentiment in financial markets has improved a little, supported by policy actions from a number of central banks. But the underlying picture for global growth remains weak, and significant adjustments in indebtedness and competitiveness are still required in the euro area. Inevitably, that has implications for our own banking system and economy.
Against that background, the Financial Policy Committee’s (FPC) primary concern has been to ensure that UK banks have sufficient capital to underpin the resilience of the banking system, so that they are on a solid…
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Categories: Capital & Strategic Issues
, Government Finance
, Performance Management
, Risk and Regulation
Keywords: Mervyn King
, Bank of England
, FSA UK
, Funding for Lending Scheme