BoE fears that banks’ capital buffers may be inadequate

Members of the Bank of England’s (BoE) financial policy committee (FPC) have expressed concerns that UK banks’ capital buffers may not be adequate when faced with riskier lending and increasing dangers to the global financial system.

The FPC maintained its countercyclical capital buffer (CCyB) at one per cent. However, “some members noted considerations that might challenge its adequacy”, according to the minutes from its latest meeting published yesterday.

Currently large banks are required to hold the extra capital to be drawn down in the event of another financial crisis. The FPC has said that it will consider the effects of shadow bank lending and looser mortgage standards in particular in its next assessment of banks’ resilience in stress tests at the end of 2018.

The members have warned that “strong risk appetite” since the last bank stress tests could have affected banks’ exposures.

Furthermore, “riskier corporate lending” in the non-bank sector could also leave bank loans at higher risk of default.

    Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


The new episode of The Mortgage Insider podcast, out now
Regional housing markets now matter more than ever. While London and the Southeast still tend to dominate the headlines from a house price and affordability perspective, much of the growth in rental yields and buyer demand is coming from other parts of the UK.

In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance.

The role of the bridging market and technology usage in the industry
Content editor, Dan McGrath, sat down with chief operating officer at Black & White Bridging, Damien Druce, and head of development finance at Empire Global Finance, Pete Williams, to explore the role of the bridging sector, the role of AI across the industry and how the property market has fared in the Labour Government’s first year in office.


Helping the credit challenged get mortgage ready
A rising number of borrowers are finding it harder to access mortgages due to being credit challenged - whether that’s from historic debts, a county court judgment, or having little to no credit history.

In the latest episode of the Mortgage Insider podcast, Phil Spencer is joined by Eloise Hall, Head of National Accounts at Kensington Mortgages, and Alastair Douglas, CEO of TotallyMoney.

The future of the bridging industry and the Autumn Budget
MoneyAge content editor, Dan McGrath, is joined by head of marketing at Black & White Bridging, Matt Horton, to discuss the bridging industry, the impact of the Autumn Budget and what the future holds for the sector.