Financial regulators have come close to demanding that banks hold more loss-absorbing capital to cool signs of overheating in credit markets, after deciding that risks in the system are building.
Minutes of the Bank of England’s financial policy committee meeting show that supervisors considered forcing banks to strengthen their defences against a crisis by raising the counter-cyclical capital buffer “a little above” its present level.
The FPC decided against raising the requirement this month, but it will revisit the subject at its next meeting in June.
