The Bank of England has eased special capital requirements for banks saying that the outlook for UK financial stability is “challenging”, following the vote to leave the European Union.

The move potentially frees up £150bn for lending, the bank’s Financial Policy Committee (FPC) said, which could help if uncertainty caused by leave vote causes the economy to slow down and banks to be cautious.

The Bank of England governor Mark Carney said “It means that three-quarters of UK banks, accounting for 90{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} of the stock of UK lending, will immediately – immediately – have greater flexibility to supply credit to UK households and firms”.

The report warned: “There is evidence that some risks have begun to crystallise. The current outlook for UK financial stability is challenging.”


Source: BBC Business News