Banking stocks were in demand on Wednesday after playing down concerns about capital requirements and as speculation ramps up regarding the potential reprivatisations of both RBS and Lloyds.Both part-nationalised lenders released statements this morning, reassuring the markets that they would be able to fulfil new heavier capital requirements, following an investigation in March which found that UK banks had a combined capital shortfall of around £25bn.RBS (+2.69%) confirmed its confidence in improving its Core Tier-1 capital ratio and its ability to meet targets through continued delivery of its recently updated business plan. Chief Executive Officer Stephen Hester said the board was pleased with RBS's "progress and momentum" towards completing its return to full financial health. Meanwhile, Lloyds (+2.36%) said it would be able to meet the new levels without taking recourse to further equity fundraisings or the utilisation of additional contingent capital securitiesBoth banks, which were bailed out during the financial crisis in 2008, have delivered an impressive share-price performance since the start of the year as hopes have increased for the government to offload its stakes within the next year.So far in 2013, the FTSE 350 banks index has increased by nearly 19%, extending the rise over the last 12 months to 53%.A report by the International Monetary Fund (IMF) today urged the government to sell its interest in the two 'intervened' banks "in a way that maximizes the value for taxpayers, strengthens confidence and competition in the sector, and minimises outward spillovers". Elsewhere in the sector, HSBC (+0.76%) was making gains after Bank of America Merrill Lynch raised its target price for the shares from 755p to 785p, though it kept its 'neutral' recommendation.Top performing sectors so far todayMining 17,499.61 +1.38%Pharmaceuticals & Biotechnology 11,765.39 +1.14%Forestry & Paper 10,087.38 +1.02%Banks 5,313.34 +0.99%Household Goods & Home Construction 10,965.66 +0.93%Bottom performing sectors so far todayTechnology Hardware & Equipment 1,215.83 -1.45%Mobile Telecommunications 4,611.99 -1.10%Construction & Materials 3,857.34 -1.01%Personal Goods 23,708.80 -0.96%Electricity 10,324.87 -0.71%BC