Carney warns housing market: "Brexit conditions will be difficult"

The Bank also says Brexit economic risks have already "begun to crystallise".

The BOE's Financial Policy Committee said it agreed to lower capital requirements for United Kingdom banks by GBP5.7 billion ($7.6 billion) in a move that should allow them to lend an extra GBP150 billion to United Kingdom businesses and households after Brexit.

Bank of England governor Mark Carney speaks during a news conference.

In another sign that risk sentiment had soured, the US 10-year Treasury yield, a benchmark for borrowing costs across the globe, fell to a record low as investors sought safe-haven assets.

The Bank of England will publish its latest financial stability report at 10.30 a.m. BST (5.30 a.m. ET) on Tuesday.

The 0% rate would be maintained until at least June next year, the FPC said.

Carney's view is being echoed across the financial sector, and predictions about a coming recession are now widespread, with some banks estimating that Brexit could wipe an average of 4% off the UK's previous growth estimates over the next three to four years.

In his third statement since the Brexit vote, Mr Carney sought to assure that action taken by the Bank was helping shore up the economy and financial system.

At the auction of funds in exchange for collateral, 12 days after Britain voted for a so-called Brexit, banks were allotted 1.35 billion pounds ($1.8 billion).

Although Mr Carney made it clear that the economic risks were still very visible - and indeed some, such as sterling's slump, were beginning to "materialise" - preparation ahead of the referendum was now paying off.

"The market is still likely under-pricing BoE easing, with our economists forecasting a 25 basis point rate cut next week followed by a 25 basis point cut at the August meeting", wrote BNP Paribas strategists in a research note, adding that they also expected an asset-purchase programme to be announced at the November meeting.

The panel is also watching valuations in the commercial real-estate market, the vulnerability of indebted households and landlords, the global economic outlook and fragile liquidity in financial markets.

The report said the announcement was created to reduce pressure on lenders "to restrict the provision of financial services, including the supply of credit and support for market functioning".

Mr Carney also signalled the possibility of the Bank reviving its quantitative easing programme, as well as other actions to contain the fallout from the European Union referendum.

Commenting on the move, Adam Tyler, chief executive of the National Association of Commercial Finance Brokers (NACFB), said: "In reducing its capital buffers and freeing up an additional £150bn, the Bank of England has put the ball firmly in the court of the banks".

In the eurozone, Italy shifted into focus after the European Central Bank (ECB) warned Italy's number-three lender Banca Monte dei Paschi di Siena had dangerously high levels of bad debt.

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