Bank of England gives lenders six years to plug £121bn black hole

Bank of England gives lenders six years to plug £121bn black hole

“Well capitalised and resilient firms are crucial for ensuring financial stability and supporting UK growth,” said Andrew Bailey, PRA chief executive.

In the wake of the financial crisis, regulators across the world have been pushing banks to increase the amount of capital they hold as a buffer to future financial problems.

Last month the PRA revealed that eight of Britain’s biggest lenders – including Barclays, Royal Bank of Scotland and Lloyds Banking Group – had a combined core capital shortfall of £27.1bn.

However, the European Union wants banks to have more protection.

On Tuesday, Barclays announced plans to plug a larger-than-expected £12.8bn capital hole. The bank will raise £5.8bn from shareholders, as well as a further £2bn through the sale of bonds convertible into shares.

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