Finance
Bank of England's Bailey urges banks to boost lending after capital change
Published by Global Banking and Finance Review
Posted on December 2, 2025
1 min readLast updated: January 20, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on December 2, 2025
1 min readLast updated: January 20, 2026
Bank of England's Andrew Bailey urges banks to boost lending after a capital change, highlighting mutual benefits for banks and the economy.
LONDON, Dec 2 (Reuters) - Banks should increase their lending to boost the economy following a reduction in the amount of capital they need to set aside, the Bank of England Governor Andrew Bailey said on Tuesday.
Bailey told a press conference that while it was not for the BoE to dictate how banks run their businesses, they stand to gain from boosting credit to companies and households, as stronger growth would improve their own performance and returns.
“There is a two-way relationship here,” he said when asked how the BoE could ensure banks lent the money rather than returned excess capital to shareholders. “If the banks support the economy by lending, that will strengthen the economy and the banks will benefit from that … I would expect that they will have that very much in mind when they think about the consequences of this.”
(Reporting by David Milliken and Phoebe Seers; Editing by Tommy Reggiori Wilkes)
Credit growth refers to the increase in the amount of loans and credit extended by financial institutions to individuals and businesses, which can stimulate economic activity.
Financial stability is a condition where the financial system operates effectively, with institutions able to manage risks and absorb shocks, ensuring the smooth functioning of the economy.
Business investment involves the purchase of goods and services by businesses to enhance their production capacity, which can lead to economic growth and job creation.
The Bank of England is the central bank of the UK, responsible for issuing currency, managing monetary policy, and ensuring financial stability within the economy.
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