UK: FPC asks FSA to review bank capital

The Interim Financial Policy Committee of the Bank of England published its bi-annual financial stability report yesterday: see here. The FPC has recommended that the Financial Services Authority take action to ensure that the capital of UK banks and building societies reflects "a proper valuation of their assets, a realistic assessment of future conduct costs and prudent calculation of risk weights". This reflects the FPC's concern that banks' capital could be overstated.