LONDON, Dec 2 (Reuters) - Banks should increase their lending to boost the economy following a reduction in the amount of capital they need to set aside, the Bank of England Governor Andrew Bailey said on Tuesday.

Bailey told a press conference that while it was not for the BoE to dictate how banks run their businesses, they stand to gain from boosting credit to companies and households, as stronger growth would improve their own performance and returns.

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“There is a two-way relationship here,” he said when asked how the BoE could ensure banks lent the money rather than returned excess capital to shareholders. “If the banks support the economy by lending, that will strengthen the economy and the banks will benefit from that … I would expect that they will have that very much in mind when they think about the consequences of this.”

https://www.reuters.com/sustainability/boards-policy-regulation/bank-englands-bailey-urges-banks-boost-lending-after-capital-change-2025-12-02/