Bank of England Claims UK Banks May Need Even More Capital

The major UK banks may need to raise more capital as protection against possible future losses, the Bank of England's Financial Policy Committee has recently warned.

Current bank governor Sir Mervyn King said there were "good reasons" to think current capital ratios did not give an accurate picture of financial health. In the event that more capital is required this could have a significant impact on current mortgage rates.

His comments came as he presented the Bank's Financial Stability Report. The report suggested that the 'Big Four' UK banks need £5bn-£35bn of new capital. However, not everyone agrees, the BBC business editor Robert Peston said, "the precision of this calculation is somewhat to be questioned because it is based on 2011 data and also because it excludes the banks' huge financial trading activities."