Bank of England Delays Capital Requirement Rules Amid U.S. Resistance

The Bank of England announced a one-year delay in implementing stricter bank capital requirements to January 2027. The delay comes amid opposition to these standards from U.S. banks. The Basel Committee's rules aim to enhance banking safety post-2008 crisis. Britain's Deputy Governor advocates avoiding relaxed regulations.

The Bank of England has postponed the introduction of stricter bank capital requirements by one year, marking a shift to a January 2027 timeline. This delay follows significant resistance to the global standards in the United States.

These regulations, crafted by the Basel Committee, represent the final wave of international reform efforts intended to bolster the banking system's resilience after the 2008 financial crisis. However, they have encountered strong objections from U.S. banks. Travis Hill, the likely future head of the U.S. banking regulator, has advocated for less stringent regulations, suggesting a re-evaluation of the 'Basel endgame' capital rules.

The Bank of England's statement regarding the Basel 3.1 regulation was issued through its Prudential Regulation Authority (PRA) in collaboration with the Treasury. The delay is intended to provide more clarity concerning the United States' implementation plans and considers competitiveness and growth factors. The Bank's Deputy Governor, Sam Woods, has emphasized the importance of avoiding relaxed financial regulations domestically, including potential adjustments for small business lending.

(With inputs from agencies.)