UPDATE 1-Bank of England quizzing UK banks over commodities exposure - source

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LONDON, Oct 8 (Reuters) - The Bank of England has askedBritish banks to report their exposure to commodities and ensurethey are mitigating risks effectively, a source familiar withthe situation said on Thursday.

Prices for oil and other commodities have fallen sharply inrecent months, and earlier on Thursday the Financial Timesreported the BoE move had been triggered by the sharp fall inthe shares of commodities and mining company Glencore.

"This is something being done in the course of normalsupervision," the source said, adding that the request had beenmade by the Prudential Regulation Authority, the arm of the BoEin charge of day-to-day bank regulation.

"It is not asking (banks) to take any particular action andit has not been prompted by any particular concern about thecommodity sector. The PRA is making sure the firms understandthe risks they are exposed to and mitigating them accordingly."

Shares in Glencore dropped by 30 percent on Sept. 28, beforerecovering in subsequent days after the firm mooted sales ofsome of its units to reduce its $30 billion debt pile.

Two of its rivals, the privately-held Vitol and Trafigura,earlier this week raised over $10 billion in finance, which theysaid showed bankers understood the sector better than bond orequity dealers.

Copper, iron ore <.IO62-CNI=SI> and crude oil prices have tumbled by 16 to 25 percent in 2015, puttingpressure on miners to turn a profit. (Reporting by Huw Jones, writing by David Milliken, Editing byWilliam Schomberg and Toby Chopra)