People are silhouetted on a sunny morning as they walk past the columns of the Bank of England in the City of London, May 19, 2014. REUTERS/Andrew Winning
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The other five big lenders tested – HSBC, Barclays, Lloyds Banking Group, Santander and Nationwide – did not have to take action.The BoE said that credit conditions were largely back to normal after the financial crisis and therefore banks should hold an extra so-called counter-cyclical capital buffer (CCB) of 1 percent of risk-weighted assets during such times – equivalent to 10 billion pounds across the system.It stands at zero currently, but the BoE has already required some banks to hold extra capital due to firm-specific risks, meaning some lenders may not have to raise much fresh capital.The BoE also said it expected the banking sector as a whole to hold high-grade tier one equity capital of 13.5 percent of risk-weighted assets by 2019, up from 13 percent now.The BoE has said it wanted to give banks more clarity about its long-run aims for the amount of capital they hold. Banks have complained that in the past, the BoE has unexpectedly piled on extra capital requirements, making it hard for them to lend or decide which lines of business to stay in.
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