In its Financial Stability Report (FSR), the Bank revealed that the big four lenders – RBS, Lloyds, Barclays and HSBC – may need to take £15bn of extra provisions on consumer loans and European debt, “a further £4bn-£10bn” to cover fines and customer compensation, and “between £5bn and £35bn” to meet regulatory risk standards.

Sir Mervyn King, the Bank’s Governor, said the potential losses distorted the “picture of banks’ health” and that lenders may have to “raise capital or take steps to restructure”, the Daily Telegraph reports.

King also added last week that he thought banks could be underestimating the extent of the future losses they face, as well as the impact of past misconduct.

This could include the payment protection insurance (PPI) scandal, which has seen the big banks forced to repay billions of pounds to consumers after they were ruled to have mis-sold insurance plans.