The Bank of England told banks on Wednesday they can tap one of their capital bu...
LONDON - The Bank of England told banks on Wednesday they can tap one of their capital buffers to maintain lending during the coronavirus epidemic, but warned they must not use the cash for bumping up bonuses or dividends.
“The FPC expects to maintain the 0% rate for at least 12 months, so that any subsequent increase would not take effect until March 2022 at the earliest,” the BoE said in a statement.The BoE’s Prudential Regulation Authority, which supervises banks, said it expects lenders not to increase dividends or bonuses in response to releasing the CCYB.
Last year’s stress test of leading banks in Britain showed that lenders could still provide loans to businesses even during a prolonged economic downturn “as well as falls in asset prices much larger than experienced in recent weeks”, the BoE said.
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