HELSINKI (REUTERS) - A Bank of England policymaker defended new rules to make banks more resilient to financial crises, saying on Thursday they would help shore up economic growth although restoring confidence in the system would take time.
"More resilient banking systems will enhance the capacity of monetary policy to underpin growth in an economic downturn," Bank of England Deputy Governor Paul Tucker said in a speech to be delivered in Finland.
"It will be a while before confidence in the system is restored, and never again should confidence be so blind."
British banks have complained that new rules for higher capital levels and other post-crisis reforms may crimp their ability to lend, hurting economic growth.
Mr Tucker challenged that argument, saying raising more capital could reduce the funding costs of banks.
He also said rules to govern finance could not be set in stone.
"That is why the new macroprudential authorities, such as the Bank of England's FPC (Financial Policy Committee), will be able to temporarily adjust capital requirements when circumstances warrant," he said in the speech.