US EditionBank of England eases bank capital requirements by 1 percentage point
The Bank of England reduced the Tier 1 capital benchmark to 13%, potentially enabling increased lending and shareholder payouts amid evolving international regulatory standards.
- On Tuesday , the Bank of England announced it eased the Tier 1 capital benchmark by one percentage point to around 13% of risk-weighted assets.
- The BoE's Financial Policy Committee has been reviewing the capital framework since July amid a push to balance growth and stability, and the BoE said it weighed crisis resilience against the economic cost of higher capital.
- The BoE noted the new benchmark includes an 11% underlying optimal level plus 2 percentage points for measurement gaps, replacing the 14% previous benchmark set in 2015, the first cut in about a decade.
- Banks could see more capacity to lend as the BoE said banks generally have capital headroom, which should give UK lenders greater confidence to support households and businesses.
- With warnings from BoE governor Andrew Bailey, UK Finance warned industry could lose market share as the US eases rules and EU reviews frameworks.
14 Articles
14 Articles
Evening Standard
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Bank of England eases bank capital requirements
Britain's central bank has eased the capital requirements for lenders by 1 percentage point to 13%, reducing the amount they need to hold in reserve against adversity in a boon to banks already riding high from record recent profits.
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