BoE lowered amount of capital banks must hold in reserve
The Bank of England took steps on Tuesday to ensure British banks keep lending as the financial consequences of the country's decision to leave the European Union began to materialize, especially in commercial real estate. The BoE, which is trying to cushion the economy from the June 23 referendum result, said it would lower the amount of capital banks must hold in reserve, freeing up an extra 150 billion pounds ($196 billion) for lending.
Governor Mark Carney recalled the central bank's warnings in March that the referendum was the biggest near-term domestic risk to financial stability. "Some of those risks have begun to crystallize," he said. Separately, finance minister George Osborne met the heads of top banks and they issued a joint statement afterwards to say the lenders would free up more capital for lending.
Sterling is currently being traded few points above 1.30 level. Pair is likely to find support around 1.30 handle and resistance above 1.3150 level.
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