Bank of England Delays Tougher Capital Requirements

LONDON (Reuters) – The Bank of England announced on Friday the postponement of stricter bank capital requirements until January 2027. This decision follows significant pushback against global standards in the U.S.

The regulations set forth by the Basel Committee represent the final wave of international reforms aimed at enhancing the safety of the banking system post the 2008 financial crisis and are expected to be applied by member jurisdictions.

U.S. banks have notably opposed these stringent requirements. Travis Hill, the prospective head of the U.S. banking regulator, has proposed a lighter regulatory approach and is open to reassessing the ‘Basel endgame’ capital rules.

The statement regarding the Basel 3.1 regulation was issued by the Bank’s Prudential Regulation Authority (PRA) after discussions with Britain’s Treasury. The PRA mentioned, “This allows more time for greater clarity to emerge about plans for its implementation in the United States,” highlighting considerations of competitiveness and growth.

Bank of England Deputy Governor Sam Woods expressed earlier this month the importance of avoiding a “race to the bottom” regarding financial regulations. The authority has indicated it will tailor some Basel proposals to align with the needs of the domestic banking sector, including capital requirements for small business lending.