• Says idea that well capitalised banks are better to help the economy is still not entrenched
  • Banks still need to be persuaded that well capitalised lenders are important to economic growth

Banks have been countering by saying that lending to the economy is hard while the regulators keep pushing them to beef up their capital. Andrew Bailey counters that by saying;

“My experience tells me that we have had to work harder, and still have to do so, to embed the idea that a stable financial system is a necessary condition for economic growth and other economic welfare benefits. I am firmly of the view that last year’s actions on capital were correct, and I have no doubt at all that the recovery in bank lending to support economic activity requires a belief and an expectation that the banking system is and will remain well- capitalised, and that if we doubt either of these positions, action will be taken,”

Deputy governor Andrew Bailey was speaking at the City Week 2014 conference