British banks are safer than they used to be - but borrowing could be about to get a lot more expensive

The Bank of England has warned lenders that it will introduce a new requirement from next March forcing them to set aside more cash when the going is good, to use whenever the next crisis strikes and their loans go bad.

Ultimately, it could mean up to £10 billion being put away for a rainy day.

After the UK's experience during the last financial crisis when the government had to step in with taxpayers' money to bail out several banks, this makes sense - in fact, it's surprising the regulator hasn't demanded the banks already prepare.

But lenders argue it is expensive for them to do, and the side effect will be borrowing becoming more expensive.

What the Bank has highlighted is a new way for them to manage risk in the economy, beyond the blunt tool of interest rates.

This new requirement of lenders will trigger a parallel path to raise mortgage rates while leaving the main Bank of England base rate where it is.

Separately, the Bank tested all the main UK banks against a scenario where emerging markets suffer a collapse (something which almost became a reality this summer).

The good news is that all the banks passed - but two only did so by the skin of their teeth: RBS and Standard Chartered just met the levels of capital required after raising hefty levels of cash earlier this year.

It means the British banking system is safer than it was, but there is more work yet to do.