BoE FPC could likely decide on date for British banks' counter-cyclical buffer

BoE's Financial Policy Committee in its Dec meeting agreed that the amount of extra capital British banks should set aside to protect them from future economic downturns should be 1 percent of their risk-weighted assets, compared with zero percent at present.

However, no decision has been taken as to when the banks should start to put aside this capital. Intense behind-the-scenes debate is going on over when British banks should set aside this counter-cyclical buffer and the next Financial Policy Committee meeting later this month could throw some light on it.

BoE Governor Mark Carney said on Tuesday that possible Brexit was the single biggest domestic risk to Britain's financial stability. British voters will decide in a referendum on June 23 whether the country stays in the EU or leaves. Investors worry that a 'Brexit' could drag down growth, push back UK rate hike expectations and also threaten the huge foreign investment flows Britain needs to balance its current account deficit.

The FPC holds a quarterly meeting on March 23 and makes a public statement on March 29.