Bank of England says bank buffer may need reworking to handle crises



© Reuters. FILE PHOTO: The Bank of England in London, Britain

LONDON (Reuters) – The design of bank buffers may need changing to encourage lenders to tap their capital and avoid a credit crunch in the economy, the Bank of England’s Deputy Governor Jon Cunliffe said on Thursday.

Even though regulators have given banks the green light to dip into buffers to help businesses survive the COVID-19 hit to the economy, there was a “first mover disadvantage” to doing so as it could limit dividends and other payouts, Cunliffe said.

“We will need to think through this question more as the recovery – albeit a bumpy one – gathers pace, as impairments mount and it becomes clearer how permanent the damage will be,” Cunliffe told an online event hosted by the Washington-based Peterson Institute for International Economics.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Source link