British banks raising capital

Ian Rogers
Banks are expected to take more action to shore up their own balance sheets as a complement to the liquidity bail-out from the Bank of England, Reuters reports.

"If you look at what's been happening in the last few days, the pressure on banks to declare the extent of any losses they've made ... and how they are going to deal with it and how they are going to raise money from their shareholders—I think you'll see much, much more of that," Britain's finance minister Alistair Darling said.

Royal Bank of Scotland, Britain's second largest bank, said it was considering a share issue and others in the sector are expected to follow.

Reuters reported RBS is seeking to raise more than US$20 billion.

The BOE is initially offering to swap £50 billion worth of government securities for mortgage-backed securities.

"There is no arbitrary limit on it," Bank of England Governor Mervyn King told reporters.