The U.K. Financial Services Authority relaxed bank capital requirements for loans granted under the Bank of England's, Funding for Lending Scheme, which could lead to more bank lending, according a Standard & Poor's sector update published today.

The FSA said on Sept. 27, that  U.K. banks will not be required to hold any extra capital on  increased lending if the new loans qualified for the Funding for Lending scheme. The U.K. regulator said "the precise amount of this offset will be determined in the context of discussions with firms on their capital adequacy and forward looking capital plans."

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