Bank of England urges banks to raise capital against potential shocks

British banks need to raise more capital as they are not reserving enough funds to withstand potential financial trouble, the Financial Policy Committee (FPC) under Bank of England (BOE) warned in its report released Friday.

The committee advised banks to raise external capital as early as feasible.

The FPC, which will gain legal power to order banks to take action next year, said that capital is not yet at levels that would ensure resilience in the face of prospective risks.

It would review progress made by banks at its next meeting in June, the BOE watchdog added.

According to the 11-member committee, the overall outlook for financial stability remains fragile though immediate financial market tensions have eased.

In the report, FPC also has requested powers that would enable it to tackle specific parts of the economy and introduce limits to the amounts banks can borrow as a proportion of their assets.

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.

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