Cable accuses BoE of holding back economic recovery - FT

(Reuters) - Business Secretary Vince Cable has accused the Bank of England of holding back the economic recovery by imposing excessive financial burdens on banks and demanding that they build up high levels of capital, the Financial Times reported.

Paul Tucker, the central bank's deputy governor for financial stability, pushed British lawmakers earlier this month to introduce a new rule that would require UK banks to meet a limit on lending as a proportion of their capital and curb banks' risk exposure.

However, some bankers have complained that demands they build up capital levels run counter to calls from the government and the Bank that they lend more in order to boost the country's slow economic recovery.

"One of the anxieties in the business community is that the so called 'capital Taliban' in the Bank are imposing restrictions which at this delicate stage of recovery actually make it more difficult for companies to operate and expand," the FT quoted Cable as saying in an interview.

"It is clear that the main banks are failing to support good British companies in key areas like exporting and innovation," Cable told the FT, expressing his concerns about small business lending.

Britain's Prudential Regulation Authority (PRA) said on June 20 that it would set a leverage ratio of 3 percent for UK banks, as required under Basel III international capital rules, by January 2018.

Big banks such as Barclays Plc and Nationwide bank fall short of the minimum limit, the PRA said last month.

(Reporting by Abhirup Roy in Bangalore; Editing by Chris Gallagher)

Source: http://news.yahoo.com/cable-accuses-boe-holding-back-economic-recovery-ft-005056170.html

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