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