Bank of England quizzing UK banks over commodities exposure - source

LONDON (Reuters) - The Bank of England has asked British banks to report their exposure to commodities and ensure they are mitigating risks effectively, a source familiar with the situation said on Thursday.

Prices for oil and other commodities have fallen sharply in recent months, and earlier on Thursday the Financial Times reported the BoE move had been triggered by the sharp fall in the shares of commodities and mining company Glencore.

"This is something being done in the course of normal supervision," the source said, adding that the request had been made by the Prudential Regulation Authority, the arm of the BoE in charge of day-to-day bank regulation.

"It is not asking (banks) to take any particular action and it has not been prompted by any particular concern about the commodity sector. The PRA is making sure the firms understand the risks they are exposed to and mitigating them accordingly."

Shares in Glencore dropped by 30 percent on Sept. 28, before recovering in subsequent days after the firm mooted sales of some of its units to reduce its $30 billion (£20 billion) debt pile.

Two of its rivals, the privately-held Vitol and Trafigura, earlier this week raised over $10 billion in finance, which they said showed bankers understood the sector better than bond or equity dealers.

Copper, iron ore and crude oil prices have tumbled by 16 to 25 percent in 2015, putting pressure on miners to turn a profit.

(Reporting by Huw Jones, writing by David Milliken, Editing by William Schomberg and Toby Chopra)