On average, 20 percent of consumer loans would need to be written off over a three-year period, compared with a 2 percent write-off rate at present, the BoE said. Monday's warning is part of a fuller assessment of bank risks which the BoE will publish on Nov. 28. After that, it will tell banks how much extra capital they need to hold based on the individual riskiness of their lending. J.P. Morgan economist Allan Monks said Monday's announcement represented an "incrementalist" approach from the BoE's Financial Policy Committee, as it stopped short of placing direct curbs on consumer lending. "More direct intervention in the consumer loan market is unlikely unless banks fail to comply with the BoE’s requirements," Monks said.

Source: New York Times September 25, 2017 08:40 UTC