#A to Z BBC Help Terms of Use BBC Accessibility links * Skip to content * Skip to local navigation * Accessibility Help bbc.co.uk navigation * News * Sport * Weather * Travel * Future * Autos * TV * Radio * More… Search term: ____________________ (Submit) Search BBC News Business * Home * UK * Africa * Asia * Europe * Latin America * Mid-East * US & Canada * Business * Health * Sci/Environment * Tech * Entertainment * Video * Asia Business * Market Data * Economy * Companies 23 October 2012 Last updated at 20:43 GMT Share this page * Delicious * Digg * Facebook * reddit * StumbleUpon * Twitter * Email * Print King says banks must raise their capital levels Governor of the Bank of England Sir Mervyn King Please turn on JavaScript. Media requires JavaScript to play. Sir Meryn King: "Creditors must acknowledge further likely losses" Continue reading the main story UK Economy * The never-ending search for work * Four steps to getting a job * How to write a successful CV * UK's productivity puzzle The UK and other major economies will remain weak until banks have sufficient capital to absorb "likely" future losses from bad loans, the governor of the Bank of England has warned. Sir Mervyn King said this was because the banks' current "insufficient capital" was continuing to deter them from lending to households and firms. He added that banks needed to accept that further bad debts were expected. Sir Mervyn said only such a change could allow economies to prosper again. "I am not sure that advanced economies in general will find it easy to get out of their current predicament without creditors acknowledging further likely losses, a significant writing down of asset values and recapitalisation of their financial systems," he said. "Only then will it be possible to return to a more normal provision of vital banking services so crucial to an economic recovery". 'Encouraging signs' Speaking at an event in Cardiff, Sir Mervyn said the government and Bank of England's latest effort to boost bank lending - the Funding for Lending scheme - must be used as a "window of opportunity" to "restore the capital position of the UK banking system". Yet he said the initiative could only be "temporary". Continue reading the main story “Start Quote For what it is worth, some may well see Sir Mervyn's attack on helicopter money as an attack on a candidate to succeed him as governor” End Quote image of Robert Peston Robert Peston Business editor __________________________________________________________________ * Read more from Robert Under the Funding for Lending scheme, commercial banks can borrow up to £60bn from the Bank of England at a low rate of interest. Turning his attention to the wider economy, and with the latest UK economic growth figures out on Thursday, Sir Mervyn said the economy was "barely higher than two years ago". Yet he added that there were "encouraging signs", particularly in the jobs market. He added that the Bank of England would "think long and hard" before it decides to increase its programme of quantitative easing (QE) from the current level of £375bn. Under QE the Bank pumps fresh money into the banking system to try to boost lending. More on This Story UK Economy Unemployment * Mike Bailes, Hayley Connor The never-ending search for work Unemployment figures show that, despite a drop in the number of people out of work, many people are still looking for a job - but there are hundreds of thousands of job vacancies. ______________________________________________________________ * Four steps to getting a job * How to write a successful CV * UK's productivity puzzle * Where to find help for financial problems * High Street casualties Basics * What is GDP? * What is inflation? * What is quantitative easing? * Is inflation making you poorer? * The growing firms creating jobs * UK GDP: News and reaction Related Internet links * Bank of England The BBC is not responsible for the content of external Internet sites Share this page * Delicious * Digg * Facebook * reddit * StumbleUpon * Twitter * Email * Print More Business stories RSS * Greek striking workers in Athens in December 2012 IMF: Global recovery 'weakening' The International Monetary Fund warns again of a weakening global economic recovery, despite government efforts to stimulate growth. * French 'red carpet' for UK firms * Fixing banking too slow, Davos hears Top Stories * UK Prime Minister David Cameron walks past a map of the EU after his speech in London, 23 January EU leaders warn Cameron over poll * IMF: Global recovery 'weakening' * India urged to reform rape trials * Angry Clinton hits out at senator * Many dead in Iraqi mosque bomb Features & Analysis * Johnny Cash Prison blues Did music star Johnny Cash improve life for US convicts? ______________________________________________________________ * Man holding a pigeon Winging it Watch What if GPS trackers were strapped to racing pigeons? ______________________________________________________________ * Yair Lapid (22/01/13) Political kingmaker Rise of Israeli celebrity-turned-politician Yair Lapid ______________________________________________________________ * French soldiers patrol down the Champs Elysees avenue near the Arc de Triomphe in Paris In the firing line Top French judge fears 'new jihad' from North Africa ______________________________________________________________ Most Popular Shared 1. 1: Alcohol 'disrupts sleep cycles' 2. 2: Most parents 'lie to children' 3. 3: Norway cheese fire closes tunnel 4. 4: Massive melting of Andes glaciers 5. 5: PM pledges in/out referendum on EU Read 1. 1: Clinton to testify on Benghazi 2. 2: Apple pulls app due to 'child porn' 3. 3: Confusion over Beyonce lip-syncing 4. 4: PM pledges in/out referendum on EU 5. 5: France 'red carpet' for UK firms 6. 6: First Firefox smartphones revealed 7. 7: Helicopter crash details emerge 8. 8: Most parents 'lie to children' 9. 9: Alcohol 'disrupts sleep cycles' 10. 10: Algeria hostage's wife 'so proud' Video/Audio 1. 1: Clinton testifies on Benghazi attack Watch 2. 2: Clinton: We must support 'emerging democracies' Watch 3. 3: Experts test 'bomb-proof' train Watch 4. 4: 'This will be an in/out referendum' Watch 5. 5: Beyonce sings at Obama ceremony Watch 6. 6: Europe chilly on Cameron speech Watch 7. 7: Can GPS trackers save pigeon racing? 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