The Bank of England has told British banks to raise their capital requirements on growing domestic and external risks.
British banks will have to increase their capital buffers by 11.4 billion pounds ($14.5 billion) to protect them from economic risks related to Brexit, growing consumer credit and external shocks such as a slowdown in China.
"The Financial Policy Committee (FPC) is increasing the U.K. countercyclical capital buffer (CCB) rate to 0.5 percent, from 0 percent," the bank said in its latest financial stability report on Tuesday.
"Absent a material change in the outlook, and consistent with its stated policy for a standard risk environment and of moving gradually, the FPC expects to increase the rate to 1 percent at its November meeting," the bank added in the report.
The bank had chosen last year to reduce the capital requirements for banks to allow them to loan more to households and firms – a measure aimed at keeping the economy afloat amid the uncertainty on the country's future trade relations with the EU.
However, the financial committee noted that the economy performed better-than-expected and recognized several risks both domestically and external calling for precautions.