BoE gives banks a break by relaxing safety standards

Under the proposals, banks will be allowed to reduce the amount of easy-to-sell assets they need to hold in reserve - enabling them to lend more, the Daily Mail reports. But last night one senior MP raised fears that this could make banks more vulnerable to another crisis. All banks are forced to hold high quality assets - including gilts and treasury bills - which can be sold in a hurry in an emergency, such as a run on a bank. Yesterday the Bank's Financial Policy Committee (FPC) said British lenders are already holding more in reserve than required under European regulations. ...