Newsletter September 2011: Top central banker hints at looser capital policy

LONDON – A top British central banker has mooted the possibility of using macro-prudential policy to stimulate risk-taking and economic activity, with the implied suggestion of a temporary reduction in bank capital requirements. This is the first time a senior financial official from a major economy has hinted that it might be time to use macro-prudential tools to address the economic recession afflicting both sides of the Atlantic.