Bank of England and financiers 'set for showdown over balance sheets'

11 March 2013

Financiers are on collision course with the Bank of England (BoE) with regard to the state of their balance sheets.

That is according to industry insiders, who have told The Times that lenders are facing a showdown with the central institution later this month in order to discuss the level of transparency attached to their accounts.

It is thought the Financial Policy Committee - which is headed up by BoE governor Sir Mervyn King - believes there is currently a capital "black hole" of up to £50 billion ($73.4 billion) in the UK banking sector due to hidden losses caused by issues such as overvalued assets.

Senior figures on the panel will meet next week (19 March) to make a final decision on the size of this shortfall before chancellor George Osborne's forthcoming budget.

However, banking executives have been critical of this process on the basis that it is causing a lot of uncertainty in the industry.

By Claire Archer

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