LONDON (MNI) – The Bank of England’s interim Financial
Policy Committee was united in its call to get banks to take decisive
action to remove uncertainty over the adequacy of their capital levels,
so that they can go ahead and raise funds sustainably and lend to the
real economy.
The minutes of the FPC’s November meeting revealed that the FPC
believed banks should be able to obtain sustainable funding, without
the use of the BOE’s Funding for Lending Scheme, if they could convince
markets they had adequate capital and were not overstating the amounts
they had.
The FPC also returned to the vexed question of bank executive
remuneration, warning that even ‘long term’ performance goals tended to
be three years, a shorter timeframe than the typical credit cycle.
The FPC urged banks to rethink executive remuneration to make it
reflect the full risks the bank management was taking.
The FPC said risks to financial stability had reduced somewhat, but
the euro area risks were still substantial although market fears over
near term Eurozone risks had eased considerably.
-London newsroom: Tel+44 207 862 7491; email: drobinson@mni-news.com
[TOPICS: M$$BE$]
