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BoE official: British banks must embrace risk

11 June 2012

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BoE official: British banks must embrace risk
Andy Haldane - Executive Director of Financial Stability, Bank of England

Britain's banking industry must begin embracing risk once again if it is to recover fully in the aftermath of the global economic downturn.

That is the opinion of Andy Haldane, a policymaker at the Bank of England (BoE), who has told the Scotsman that this is essential in order to kickstart the country's economic revival.

Last month, it emerged that the UK's gross domestic product shrank by 0.3 per cent during the opening quarter of the year.

Following on from the 0.3 per cent contraction recorded during the final three-month period of 2011, this means the nation is now officially back in a period of recession.

However, Mr Haldane believes banks can play a major role in stimulating the economy as they can take full advantage of their relative strength in comparison to their continental counterparts.

"In Europe there wasn't the same loss recognition and building of buffers that UK banks have done," he noted.

By Asim Shah

Comments (1)

GB Gary Wright says:
Jun 11, 2012 15:26 GMT
Banks have to do what there supposed to do and balance risk/reward. Its not all about reward as has been the case and taking on too much risk but taking the calculated risk for the best reward. Banks are obviously not yet in the best financial position to do as much as needed but they should be able to asses on a case by case basis what is good oportunities to loan. Maybe a bit more long termism might help banks with risk assesment and new busineses to get started
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