BoE official: Banks need buffers but must still lend

14 September 2012

British banks must not stop lending in the face of potentially-huge risks in the global financial system.

That is according to Paul Fisher, policymaker at the Bank of England (BoE), who has admitted that while financiers require sizeable buffers to protect them against potential future market socks, this should not affect well-judged lending.

During an article written for City AM today (14 September), the member of the BoE's Financial Policy Committee stated that banks face "exceptional risks" at present, meaning they have to be on-guard in case such hazards crystallize, Reuters reports.

However, he also insisted that lending and risk-taking are "essential parts of banks' business models", meaning they cannot be neglected.

"Instead of worrying about the perceived costs of regulation, people should focus on the benefits to everyone of a safer banking system," Mr Fisher added.

With this in mind, the BoE official stated it is beneficial for the wider economy if lenders take appropriate and calculated risks.

By Tony Aynsley

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