Bank of England warns UK banks may lack enough capital

``In June it recommended that the FSA - which conducts day-to-day regulation of banks - consider relaxing rules on how much banks need to hold as cash buffers to reflect the emergency liquidity insurance available through the BoE's Extended Collateral Term Repo scheme. Generally though, King, who chairs the FPC, has taken a tough line on bank regulation, and favors a complete separation of investment banking from retail bank activities.''