While the Bank Financial Policy Committee (FPC) did not name any banks, analysts believe its concerns centre on part-nationalised Royal Bank of Scotland and Lloyds Banking Group, owner of Bank of Scotland, and Barclays.
And investors concluded Edinburgh-based RBS has the biggest challenges, sending its shares down 3.1% as the others benefited from a relief rally.
The FPC said further losses on property loans, eurozone exposure, fines for previous misconduct and a more prudent approach to assessing the risk on current loans may hit UK bank capital.
By: