BBA: Banks should store up capital for future losses, says BoE

Banks should retain more of their profits over the next few quarters to protect themselves against potential losses in the future, according to Paul Tucker, deputy governor at the Bank of England.

Speaking at the British Bankers’ Association conference today, Tucker says that banks ought to build up their capital now to protect themselves against the threat of adverse circumstances later on.

Tucker says: “This is not about raising Basel III requirements, it is about getting ahead of the game and replenishing capital when you can.

“This is important because the economic environment is sufficiently threatening that we could end up being grateful that the banks have had a few quarters where they could put more capital away.”