King Signals U.K. Banks Need More Capital Against Losses
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Bank of England Governor Mervyn King signaled U.K. banks may need to build up the capital they hold against potential losses, and asked regulators to report back by March on how lenders will comply.
Banks may need to make bigger provisions for future loan losses and the cost of regulatory fines and customer redress, King told reporters in London today. He said that risk-weightings may also be inappropriate, as he presented a report which said the capital ratios that they are used to calculate may be overstated by as much as 35 billion pounds ($56 billion) by the country’s four biggest banks.