Bank of England Cuts Minimum Capital Requirements to Encourage Lending

The Bank of England (BoE) decided to reduce its countercyclical capital buffer rate to 0 percent to support lenders during the period of uncertainty following the results of the referendum on the United Kingdom's membership of the European Union.

MOSCOW (Sputnik) — The Bank of England's report also suggested that the decision would raise banks' capacity for lending to UK households and businesses by up to 150 billion pounds ($197 billion).

"The FPC reduced the UK countercyclical capital buffer rate from 0.5% to 0% of banks' UK exposures with immediate effect… The FPC expects to maintain a 0% UK countercyclical capital buffer rate until at least June 2017," the BoE's Financial Stability report reads.

On June 23, a nationwide referendum was held in the United Kingdom, in which 51.9 percent of voters supported the country withdrawing from the European Union.