The financial system in Britain had become
"significantly more stable over the past six months", the Bank of England, the central bank of
Britain, said on Friday.
In its bi-annual Financial Stability Report, the Bank of England said the financial situation
had improved thanks to its quantitative easing (QE) program and its holding of its interest rate
at a historically low 0.5 percent for the past eight months.
The bank is spending 200 billion pounds (322.66 billion U.S. dollars) under the QE program to boost lending in the banking sector and use new money to buy assets from banks and other companies.
It also said that, in the past six months, British banks had been able to increase their
profits, reduce concerns about potential future losses and raise further external capital --
thereby reducing their reliance upon short-term funding.
However, it said commercial banks still had to do more to improve their long-term stability
and cautioned these banks would need further time to recover from the crisis in the financial system.
Meanwhile, the report stressed British banks "remain vulnerable to the risk of less-than-
expected economic recovery".
The latest edition of the bi-annual report outlined its current assessment of the strength of
the British financial sector and ways to improve it in the future.