UK's Banks 'Could Need Billions More Capital'
The Bank of England has taken its most intrusive step yet to regulate Britain's financial system, ordering an audit into whether banks are overstating the health of their balance sheets.
The Bank's Financial Policy Committee has asked the Financial Services Authority to go into the major UK banks and determine whether their capital positions are really as healthy as they publicly declare.
The Bank said that the country's four largest banks could need up to £35bn in extra capital because they had understated the riskiness of the assets they hold on their balance sheets.
It added that the proportion of capital banks hold - which is regarded as the key bedrock to their financial stability - could also be distorted upwards because they overestimate the future value of their assets conduct costs and underestimate future conduct costs from Payment Protection Insurance and other activities.
The Bank's Governor, Sir Mervyn King, said that the FSA would "take action to ensure that the capital of UK banks and building societies reflects a proper valuation of their assets".
Although he denied that the Bank was implying that banks had fiddled their accounts to escape regulation, the announcement will likely spark criticisms that institutions are manipulating their accounts to flatter their balance sheet positions.
But while British banks will potentially need tens of billions of pounds of extra capital, Sir Mervyn revealed that the Treasury had refused to countenance any possibility that the Government itself would have to provide any of that money - in other words, further nationalising the banks.
At the FPC press conference, Paul Tucker, the Bank's Deputy Governor for Financial Stability refused to answer whether he would serve out the remainder of his term (which runs until February 2014), having been overlooked in favour of the incoming Governor, Mark Carney.
Mr Tucker said: "I'm the deputy governor for financial stability there's a job of work to be done. I'm doing it."
what do you think?
Well of course, our non-existent manufacturing industries cannot provide capital. Get those printing presses rolling !
What ! You mean that I haven't worked in manufacturing for 37 years ? Was it all a dream ? Did I just wake up in the shower ? Seriously though, did you know that we have more manufacturing industry than the french ?
Either you are in a dream or I am. I once worked for Alfred Herbert Ltd, then Dunlop Aviation ! was I dreaming that ? were all the other machine tool firms, the great names in British autos, aviation, shipbuilding and domestic appliances etc. also dreams ?
They would be well on the way if they didn't keep paying the millions out in bonuses every year!
Lower energy bills wuo is he trying to kid. Although he probably doesnt know how much engery cost he probably never see his bills
Alfy, Alfy Alfy your silly billy, your comment has nothing to do with the subject. Dipstick. Jeeeeze
heh heh !
I Think ALFY has lost the plot ! Read the subject old lad, put your readers on. Have a minute
In the spirit of Alfies post...... How dare Wenger say that he is interested in Zaha. You just don't express an interest in another clubs players. Its not done. Hes bang out of order.
lol ...ha ha gand-Alf