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By Huw Jones and Matt Scuffham
LONDON, March 27 (Reuters) - Britain's banks discover onWednesday how much extra capital they need to keep regulatorshappy when the outcome of an inquiry into their financial healthis revealed.
The Bank of England will release the capital requirements onWednesday morning.
The BOE's Financial Policy Committee, tasked with spottingsystem-wide risks, said in November that the shortfall could beanywhere between 24 billion and 60 billion pounds ($91 billion).Analysts expect the final number to be around the middle of thatrange.
Britain's banking supervisor Andrew Bailey has been checkinghow banks tote up risks on their books to determine overallcapital requirements. He is concerned about inadequateprovisions for losses on loans, and sceptical about capitalfigures the banks were coming up with using their in-housemodels.
Hefty compensation bills for mis-selling loan insurance, over14 billion pounds ($21 billion) and rising, have also hit allfour of Britain's biggest banks.
But the focus will be on the Royal Bank of Scotland and on Lloyds, in which the government has stakes itwould like to offload by the next election in 2015. Replenishingcapital buffers is an important step in making them marketable.
Analysts at Credit Suisse estimate that Britain's fourbiggest banks - HSBC, Barclays, RBS and Lloydswill need a total of 38 billion pounds of extra capital, though11 billion pounds has already been raised since November whenBailey's investigation began.
Credit Suisse believes no bank will need to go cap in hand toinvestors and that shortfalls will be plugged by tappingdiscretionary capital buffers and retaining earnings, meaninglimiting dividends and bonuses.
