Bank outlines plans to rein in risk.Summary: The Bank of England Bank of England, central bank and note-issuing institution of Great Britain. Popularly known as the Old Lady of Threadneedle Street, its main office stands on the street of that name in London. has outlined plans for "top-up" charges to boost bank balance sheets. The Bank of England has outlined plans for "top-up" charges to boost bank balance sheets, as it seeks to add the "missing ingredient" to financial regulation. The Bank said the impact of the financial crisis could have been less costly for the economy if there had been tools available to bolster the resilience of the system and rein in rein in Verb 1. to stop (a horse) by pulling on the reins 2. to restrict or stop: either prices or wage packets had to be reined in Verb 1. the lending bubble. In a discussion paper on cutting system-wide risk in the banking system, the Bank has mooted the idea of enforcing a capital top-up charge for banks engaged in riskier activities. The surcharge could be calculated according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. size and risk, rather than a blanket requirement across all banks. Its proposals come as part of an international effort to make sure banks put more money aside in the good times to build up a capital buffer. Economies worldwide have been looking at how they could have prevented the credit crunch Credit Crunch An economic condition whereby investment capital is difficult to obtain. Banks and investors become weary of lending funds to corporations thereby driving up the price of debt products for borrowers. and subsequent banking sector meltdown that sparked a global recession. The Bank of England said in its paper, published on Saturday, that so-called macroprudential policy tools to cut system-wide risk were "an important missing ingredient from the current policy-making toolkit in the UK and internationally." It added: "Had they existed, the current crisis might plausibly have been less costly for the real economy." Independent Television News Limited 2009. All rights reserved. Independent Television News Limited 2009. All rights reserved. Provided by Syndigate.info an Albawaba.com company |
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