More Capital Needed for UK Banks

Major UK banks may need to raise more capital as protection against possible future losses, the Bank of England's Financial Policy Committee has said.

Bank governor Sir Mervyn King said there were "good reasons" to think current capital ratios did not give an accurate picture of financial health.

His comments came as he presented the Bank's Financial Stability Report.

The report suggested that the 'Big Four' UK banks need £5bn-£35bn of new capital.

The full story, reported on BBC news, also goes on to mention that adequate capital levels are also needed in the face of rising costs related to banking scandals.


This year, HSBC and Barclays were respectively hit by penalties over money-laundering and the alleged rigging of the Libor rate.

Meanwhile the banks have set aside billions of pounds to cover claims for payment protection insurance (PPI) mis-selling.

"In recent years, UK banks have also underestimated and underprovisioned for costs for conduct redress, notably for payment protection insurance (PPI) mis-selling," the stability report said.