Reinstating bank lending most pressing challenge, says King
Getting retail banks lending again is the "single most pressing issue" to address in order to kick-start the UK's economic recovery, the governor of the Bank of England has said.
According to Reuters, Mervyn King told parliament's Treasury select committee it is crucial that financial institutions have the confidence to lend, as well as the confidence that they are protected against any future losses.
He added that restoring lending to normal levels is "more important than anything else at present".
Mr King also indicated that capital adequacy rules could be relaxed in order to stimulate lending from financial institutions, the news site said.
"These are precisely the times when you would think it appropriate to reduce the minimum capital requirement at the same time as ensuring banks have enough capital to give them a cushion to absorb future losses," he said.
Mr King was appointed governor of the UK's central bank in 2003. He also serves as chairman of its monetary policy committee, which is responsible for setting interest rates.