Today's announcement by the Bank of England's Financial Policy Committee that banks have to raise an extra £25bn of capital by the end of 2013 represents a bit of history.

Never before has any British regulator instructed banks in this very public way to strengthen themselves.

Some will say stable doors and horses come to mind: it might have been more apposite if this had happened before the Great Crash of 2008, which wreaked so much havoc on the British economy in part because our banks had so little capital back then.

Better late than never, perhaps.

That said, senior bankers tell me they think it is a bit over the top. "Nobody at the Bank of England has given me a convincing explanation why our banks should have more capital than banks in the rest of the world," one sighed.

Well what the soon-to-retire governor, Sir Mervyn King, might reply is that there are few countries whose banks are so huge relative to the size of the economy. Ireland and Cyprus come to mind as economies where banks are a bit bigger relative to GDP, or economic output, and we've all seen what happened there when their banks ran out of capital.

But isn't there a danger, as I've mentioned here many times, that banks will hit their new capital ratio targets by shrinking lending, rather than finding new capital?

Well the FPC is instructing the new bank supervisor, the Prudential Regulation Authority, to stop that from happening: "The PRA should ensure that major UK banks and building societies meet the requirements…by issuing new capital or restricting balance sheets in a way that does not hinder lending to the economy".

We'll find out, at the cost of our own prosperity, if the PRA is up to this particular job. It is worth noting however that banks are big and complex, and have a lot of form in shrinking lending under the noses of supposedly watchful regulators.