Regulations which potentially constrain lending to small businesses should be eased when the economy is suffering, the Bank of England policymaker Andrew Haldane said in an interview with the Financial Times on Monday.

Haldane, executive director for financial stability at the Bank, believes the rules governing how banks calculate risk weightings should be relaxed when economic growth needs boosting.

There is a strong argument for making risk weights dynamic and real-economy focussed. At present, they are calibrated to the risk
to a bank. In future, they need to reflect returns to society, he was quoted as saying.

(Reporting by Stephen Mangan; Editing by Yoko Nishikawa)