The Bank of England said it planned to delay implementing a final set of post-financial crisis capital requirements for banks until January 2025, bringing Britain in line with the European Union in a move that banks welcomed.
Tough bank capital reforms were agreed at a global level after banks were bailed out by taxpayers in the crisis.
Lenders
already hold far more capital under the initial elements of the "Basel
III accord," whose final elements had been due to come into force in
January this year, but were delayed by a year to January 2023 due to
COVID-19.
The
European Union, however, decided to propose delaying implementation by a
further two years to January 2025 to give banks more time to adjust,
forcing Britain and other jurisdictions to decide whether to follow
suit.
The
Bank of England said it would publish a consultation paper in the
fourth quarter on implementing the final rules of Basel III.
"In
addition, taking into account the publicly-announced implementation
timetables in other major jurisdictions, and the need to provide firms
with sufficient time to implement the final policies, our current
intention is to consult on a proposal that these changes will become
effective on 1 January 2025," the BoE said in a statement on Monday.
UK
Finance, which represents banks in Britain, said the BoE statement
brought much needed clarity about the timing of new capital rules.
"Not
only will this aid the planning of a complex, multi-faceted
implementation project but it will ensure firms’ capital planning and
stress testing, which looks five years into the future, is aligned with
the prudential regulator’s expectations," said Simon Hills, UK Finance's
director for prudential policy.
Reuters
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