Lenders will also have to hold bigger capital buffers to protect against losses and there will be measures to boost competition in the banking sector.

No bank burning up its capital buffer should remain in private hands.

The key numbers: The UK's banks are not deemed to need any extra capital buffer.

Another reform would lower insurance premiums for thrifts that maintain larger capital buffers.

Banks work by managing their capital buffer and leveraging it hard.

Bank of England urges British banks to shore up capital buffers to defend against "exceptionally threatening" risks from the eurozone.

Banks should be allowed to eat into their capital buffers to free up credit, Mr Haldane said.

In any event, the Governor's call for increased capital buffers is somewhat at odds with the Government's parallel aim of increased lending.

Where the capital buffer cannot be improved by raising more capital, it tends to get done instead by shrinking the lending book.

He will, potentially, have the power to limit lending, make credit more expensive, and to force banks to pay lower dividends and bonuses to boost their capital buffers.