LONDON Nov 26 Britain's finance minister George
Osborne has asked the Bank of England to review whether it needs
more power to restrain the balance sheets of banks ahead of a
globally agreed timetable.
The BoE's Financial Policy Committee has powers to set
direction for regulating Britain's financial system.
But the FPC has no direct power to vary the so-called
leverage ratio or measure of how much capital banks must hold in
relation to their total assets, seen as a key method for reining
in risk taking at big banks.
"Therefore now is an appropriate time for the FPC to
consider whether and when it needs any additional powers of
direction over the leverage ratio, how it should use these
powers and how any new powers would fit in with the rest of its
macro-prudential 'tool-kit'," Osborne said in a letter to BoE
Governor Mark Carney.
Osborne was "open" to the review making recommendations that
the FPC may need to implement the leverage ratio ahead of a
globally agreed timetable, the letter said.
Britain may need to set a baseline leverage ratio higher
than the globally-agreed 3 percent level, Osborne said.