They're softening us up for another taxpayer-funded bank bail out

From City AM: UK banks must raise tens of billions in extra capital.

Sky News: UK's Banks 'Could Need Billions More Capital'

BBC: Major UK banks may need to raise more capital as protection against possible future losses

and so on and so forth. This all goes back to the Bank of England's Financial Stability Report:

The Committee recommends that the Financial Services Authority (FSA) takes action to ensure that the capital of UK banks and building societies reflects a proper valuation of their assets, a realistic assessment of future conduct costs and prudent calculation of risk weights.

Where such action reveals that capital buffers need to be strengthened to absorb losses and sustain credit availability in the event of stress, the FSA should ensure that firms either raise capital or take steps to restructure their business and balance sheets in ways that do not hinder lending to the real economy.

Oh dear, thinks the man in the street who only reads the headline, where are they going to get that money from? Fact is, they don't have to raise a single penny from outside the banking system, that's the bit in bold after the "or": UK banks have already raised that money, only they have treated it as bonds and not as share capital.

If the shortfall really is £35 billion, all the banks have to do is reclassify about one-tenth of the bonds (maybe it's one-fifth, who cares) they have already issued as share capital, hey presto, problem solved. The total value of all shares and bonds in issue will not change, and it might even increase slightly if you do the swap properly.

As it happens, banks bonds are trading below par and bank shares are trading at a discount to net assets, so whether you hold a £1 face value bond with a market value of 70p or shares worth 70p for every £1 of net assets is neither here nor there.

But no, the newspapers are already softening people up for the next taxpayer-funded bail out.

As to "sustaining credit availability", that is quite a separate topic. Ultimately, it is the borrower who prints the money, not the bank. Consider, if government borrowing is much the same as the government printing money printing (and it is), then so is private borrowing.