BOE FPC: Euro zone sovereign and banking risks have intensified and are biggest threat to UK banks
- Bank’s return-on-equity targets too high, do not reflect tougher rules
- May be costs to curbs on dividends and bonuses for boosting banks’ capital
- Basel rules focus on risks to individual banks in normal economic times
- Concerned that risk weights for bank assets deter beneficial leanding to real economy
- Some members think external minimum risk weights should apply to banks using internal risk models
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