The Bank of England has proposed a faithful adoption of the latest global bank capital rules for the UK’s biggest lenders, disappointing banks that were hoping for concessions such as those proposed by the EU.
The BoE on Wednesday published its plans to introduce the final package of Basel rules, agreed in the aftermath of the global financial crisis to safeguard against future calamities.
The BoE said it would stick to almost all of the rules agreed globally, though like the EU it would delay implementation by two years until 2025.
“Alignment with strong international banking standards promotes economic growth by underpinning the competitiveness of the UK as a financial centre, supporting investors’ confidence in the UK banking system and ensuring that banks can finance the economy during downturns,” Sam Woods, head of the BoE’s regulatory arm said.
He added that the UK’s proposals included “limited adjustments for the UK market”.
The EU’s plans, which are being thrashed out by Europe’s parliament, council and commission, include concessions so significant that its top banking regulators last month warned that Europe’s reputation as a financial centre could be at risk.
The UK also said that smaller banks would be allowed to continue under the existing global capital framework for a transitional period, during which time the UK would develop the new “strong and simpler” model it had promised to use for smaller banks in future.
The consultation runs until March 2023.