Newspaper article The Evening Standard (London, England)

BOE's [Pounds Sterling]25bn Call 'Will Hurt Recovery'

Newspaper article The Evening Standard (London, England)

BOE's [Pounds Sterling]25bn Call 'Will Hurt Recovery'

Article excerpt

Byline: Russell Lynch

THE Bank of England came under fire for hindering the UK's recovery today as it declared banks will have to raise an extra [pounds sterling]25 billion by the end of this year.

The Financial Policy Committee said the extra funds were needed to weather the impact of exposures to the struggling property sector, the eurozone crisis and scandals such as Libor-fixing and the mis-selling of payment protection insurance while maintaining lending in the real economy.

But the CBI warned the extra pressure on banks to raise funds would hinder efforts to kick-start credit flows to the economy. Competitive markets director Matthew Fell said: "While the FPC wants banks to meet additional capital levels in a way that will not restrict lending, it is difficult to see how this can be achieved in practice."

James Barty, head of financial policy at the Policy Exchange thinktank, added: "Bank lending to private companies in the UK has fallen by [pounds sterling]10 billion in every single year since the financial crisis. …

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