27.06.201721:49:00UTC+00Bank of England Says Banks Should Amplify Shield against Bad Loans

The Bank of England required financial institutions under its umbrella to generate about £11.4 billion ($14.6 billion) in the next few months in order to boost its shield against the threat of bad loans, as well as dangers from China and Brexit.

The BOE said Tuesday banks should appropriate £5.7 billion ($7.3 billion) in the succeeding six months should future economic shocks make some borrowers miss their repayments. Then, they need to allocate another £5.7 billion by the end of next year.

The BOE's financial committee implied creditors had become lenient regarding their lending, saying these creditors may not be putting much significance on loans' recent performance in benign situations.

Based on the committee's evaluation, the perils engulfing the financial system are still at a normal level as of the moment. However, certain pockets of risk call for vigilance. Also, lenders are relying too much on borrowers and they have extended financing to people with low credit ratings.