Bank of England Governor Mark Carney discussed the central bank’s Financial Stability Report (FSR) earlier today, and had little good news to share. In its biannual review, the BoE said the countercyclical capital buffer rate— the weighted average of the buffers in effect to which banks have a credit exposure— for UK banks was cut to 0% 0.50% with immediate effect. In turn, this will reduce regulatory capital buffers by £5.7B, boosting UK banks’ capacity to lend by up to £150B. Certainly, there has been stress in interbank lending markets that the BOE sees developing and wants to ward off. The 3M GBP LIBOR-OIS ... (full story)