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The Boston Globe

Business

British banks told to raise another $38 billion

LONDON — Britain’s new banking regulator recommended Wednesday that the nation’s lenders increase their capital buffers by $37.9 billion by the end of the year to ensure they can cover potential losses and keep lending in the event of future crises.

The Financial Policy Committee said banks need the money as a buffer against potential costs of high-risk loans, including those in the eurozone, and of resolving scandals — such as the misselling of insurance products that has forced British banks to pay billions in compensation to customers. The banks also need greater rainy-day funds in case they have to write down the value of their investments.

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