Written by Ian Withers
LONDON (Reuters) – The Bank of England said on Friday it would delay the introduction of tougher bank capital rules by a year to January 2027, following aggressive pushback against tougher U.S. global standards.
The standards, created by the global Basel Committee, are designed as the final set of international reforms to make banking systems safer after the 2008 global financial crisis and are intended for member countries to implement. Masu.
The banks face fierce opposition from U.S. banks, and analysts are wondering whether they will be eviscerated under the incoming administration of Donald Trump following the resignation of top banking regulator Michael Barr. He says it may be demolished.
The UK's decision to postpone has now turned the focus to the European Union, which now has an effective date of January 2026, a year earlier than the UK. The European Commission's Executive Office did not respond to requests for comment.
Britain's Labor government has been pressuring Britain's regulators to do more to boost growth, with Finance Minister Rachel Reeves reiterating on Thursday the watchdog's critical role.
British bank stocks rose modestly after the central bank's announcement, with Barclays up 1.9%, Lloyds up 1.2% and HSBC up 0.6%, while the broader FTSE 100 index rose 1%.
Gary Greenwood, an analyst at Shore Capital, said the reaction in bank stocks was likely to be muted as the BoE had downplayed the potential impact of reforms to banks' capital requirements.
The BoE's statement on Basel 3.1 regulations was published by the Prudential Regulation Authority (PRA), the regulatory arm that made the decision in consultation with the UK Treasury.
“This gives us more time to better define our U.S. implementation plans,” PRA said, adding that it took into account competitiveness and growth.
Implementation of the reforms in the UK had been delayed for about six months from last summer until January 2026.
Banking lobby group UK Finance welcomed the new delays.
“Given the cross-border nature of banking, international alignment on capital rules is important,” said Simon Hills, director of prudential policy at the UK Treasury.
Bank of England Deputy Governor Sam Woods said earlier this month that Britain should avoid engaging in a “race to the bottom” over financial regulation.
Regulators have already announced that they will adjust some of the Basel proposals to suit the needs of the domestic banking system, such as capital requirements for loans to small and medium-sized businesses.
(Reporting by Iain Withers; Additional reporting by William James; Editing by Christina Fincher and Timothy Heritage)
