(Bloomberg) -- U.K. banks could get even more relief from regulators intent on keeping loans flowing to the rest of the economy through the coronavirus pandemic.

The Bank of England is considering moves to alleviate the “market stigma” lenders face when they run down their capital levels to support loans to business and consumers.

The BOE said this week banks might be reluctant to use capital buffers to lend because the more they do, the likelier it is they’ll face automatic regulatory curbs on paying bonuses, dividends and coupons on some capital instruments. The BOE said authorities in the U.K. and internationally could change the rules on a temporary basis to make it easier to use the buffers or to revise the automatic consequences for payouts.

“Restricting lending to viable businesses in need of temporary support would come at a heavy cost to the wider economy -- and ultimately to the banking system,” the BOE said, while acknowledging that lenders were currently doing their part offering credit to companies that need it, with help from government programs.

Worries over coupon cancellations for additional Tier 1 instruments exacerbated a savage sell-off across the asset class earlier this year, when yields hit a record 15%, according to a Bloomberg Barclays index. Europe’s banking regulator sought to quell those fears by ruling out a blanket ban on the payments.

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