Financial Times FT.com

UK banks face being forced to buy bonds

By Peter Thal Larsen, Banking Editor

Published: December 4 2008 20:33 | Last updated: December 4 2008 20:33

Britain’s banks face being forced to buy hundreds of billions of pounds in government bonds under proposed rules designed to make them less vulnerable to market shocks.

In an effort to boost banks’ liquidity reserves, the Financial Services Authority on Thursday recommended a proportion of their assets should be in the form of highly liquid government bonds.

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