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Bank of England tightens credit rules for banks after Brexit resilience 

June 30, 2017

David Milliken & Huw Jones, Reuters

Bank of England, credit rules, Brexit

The Bank of England tightened its controls on bank credit to more normal levels on Tuesday, deciding the risk had passed of a big hit to the economy and to lending after last year's Brexit vote.

The BoE's Financial Policy Committee (FPC) said British banks must now hold 5.7 billion pounds between them as an additional buffer against bad times, and that it will probably double that in November.

After voters decided to leave the European Union a year ago, the FPC cut to zero a requirement that banks create an extra capital buffer as part of a broad range of stimulus measures to help the country cope with the shock.

But the economy has performed more strongly than expected since the referendum, despite some recent signs of a slowdown. Some of the central banks' interest rate setters now think it is time to raise its main interest rate.

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