The UK banks regulator has toughened rules on how much equity banks must hold against their assets, as it issued a damning report card showing a £27.1bn capital shortfall across Barclays, Royal Bank of Scotland, Lloyds Banking Group, Nationwide Building Society and Co-op Bank at the end of last year.

Barclays, RBS and Lloyds, with the bulk of the shortfall, said they will sell assets and shrink parts of their businesses to address the shortfalls, and won't need to issue new shares. Nationwide, accounting for £400 million of the total, didn't immediately lay out its plans. Co-op Bank earlier this week asked its subordinated bondholders to crystallise losses to help it raise the additional £1.5bn in capital it needs.