A man stands outside the Bank of England in the City of London, Britain April 19, 2017. REUTERS/Hannah McKay
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The Bank of England plans to increase capital requirements for U.K. lenders by 11.4 billion pounds ($14.5 billion) to tackle risks posed by the recent rapid growth in consumer credit and prepare for the uncertain outcome of Brexit talks. The BOE set the countercyclical capital buffer at 0.5 percent of risk-weighted assets for U.K. loans effective in June 2018, and if nothing material changes the central bank plans to increase the level again to 1 percent in November. By the time the BOE considers raising the buffer rate to 1 percent, it will be able to factor in the results of its 2017 stress test of major U.K. banks.On Brexit, the BOE said it will oversee banks' contingency planning for a "range of possible outcomes" of the talks on the U.K. withdrawal from the European Union.The central bank highlighted U.K.-located firms are counterparty to more than half of over-the-counter interest rate derivatives traded by EU companies and banks, while U.K. asset managers account for 37 percent of all assets managed in Europe.
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