BoE calls for fresh capital

27 September 2012

The Bank of England's (BoE) Financial Policy Committee (FPC) has called on UK banks to raise fresh capital from markets.

Such a move would enable lenders to take advantage of any lulls in the turmoil currently embroiling the eurozone and boost their own defences, Reuters reports.

Minutes from the FPC's September meeting indicated that although the body has not altered its stance regarding financiers raising their capital cushions, greater urgency appears to be on the cards.

Indeed, the FPC recommended banks look to seek investors for capital stock as opposed to simply focusing on holding back profits and limiting bonuses.

The organisation stated: "Recent improvements in market conditions should help in that respect, with the options including debt conversion and the issuance of suitable contingent capital instruments as well as conventional equity."

It was also recommended that banks use stable market conditions in order to rid themselves of exposures to the eurozone's most vulnerable countries.

By Tony Aynsley

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