King urges banks to issue more shares and cut dividends

The Bank of England has today warned UK banks they must consider raising more capital in the next few months to cope with the "exceptionally threatening" environment.

With the eurozone in the midst of the worst crisis since its formation, the Bank's interim Financial Policy Committee (FPC) said today banks should "give serious consideration" to raising external capital in the coming months. Bank governor Mervyn King said banks should consider raising capital by issuing new shares. He also urged banks to cut dividends and bonuses to ensure they could keep lending to businesses and consumers. The warning comes after central banks around the world yesterday took action to increase liquidity in markets as a second credit crunch on the scale of 2008'...