Reuters: Regulatory News: BoE's Haldane says bank capital must stay robust

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BoE's Haldane says bank capital must stay robust Apr 25th 2013, 10:48 LONDON, April 25 | Thu Apr 25, 2013 6:48am EDT LONDON, April 25 (Reuters) - Forcing banks to hold adequate levels of capital won't hamper their ability to feed credit to the economy, a senior Bank of England policymaker said on Thursday. Arguing that regulators who ask for higher levels of capital at banks were draining credit from the real economy, is the "economics of the madhouse", Andrew Haldane, the central bank's director of financial stability said. "This argument makes no logical sense whatsoever. The only way we will get credit channels working properly is by having a banking system that is adequately capitalised," Haladane told an Economist conference. He said efforts by central banks to stimulate economies have helped to spark a "mini rally" in stocks in the past nine months, as intended, despite the gloomy economic outlook. The policy "medicine" has worked but Haldane urged caution to avoid creating problems for the future. There was a need to ensure that such expansive policies don't "overachieve" and that the "patient does not become too addicted to the medicine".

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