The Pak Banker - - FRONT PAGE -

UK lenders must raise at least 25 bil­lion pounds ($38 bil­lion) to plug a short­fall in cap­i­tal and cover higher es­ti­mates for ex­pected loan losses, po­ten­tial fines and bet­ter risk cal­cu­la­tions, the Bank of Eng­land said.

The short­fall fol­lows an ex­am­i­na­tion by the Fi­nan­cial Ser­vices Author­ity into banks’ ex­po­sures to com­mer­cial real es­tate and euro-area economies, risk models and pro­vi­sions for com­pen­sa­tion and fines over a three-year pe­riod. The BoE didn’t pro­vide de­tails for in­di­vid­ual lenders or say how many may need to raise cap­i­tal.

The BoE pub­lished the in­for­ma­tion to­day af­ter a meet­ing of its Fi­nan­cial Pol­icy Com­mit­tee on March 19. It is push­ing banks to in­crease re­silience to shocks so they can boost lend­ing and aid an eco­nomic re­cov­ery. Gov­er­nor Mervyn King said in Novem­ber that the cap­i­tal prob­lem “is man­age­able but it re­quires some ac­tion now.”

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