Impact of Basel rules on UK lenders less than on rivals, Bank of England says

The Bank of England said on Tuesday that the implementation of the final part of the Basel global banking rules will increase capital requirements for British banks by 3%, much less than for their European Union counterparts and the United States.
Regulators began implementing stricter capital rules after the 2007-2009 global financial crisis, when taxpayers had to bail out struggling banks.

The United Kingdom, the European Union, the United States and other countries are finalizing the implementation of the last part of the so-called Basel III capital standards, adapting them to local circumstances.

The BoE on Tuesday issued the first of two “near-final” statements on the implementation of the Basel rules, explaining that it had made some changes to its initial proposals following a public consultation.

The BoE said it estimated the impact of the final version of Basel on UK banks would be “low”, with an average increase in Tier 1 capital of around 3%, once it is fully implemented. implemented by 2030.

“This figure is lower than the estimate of the European Banking Authority, which predicts an increase in Tier 1 capital of around 10% in the EU, and the estimate of US agencies, which predict an increase in Tier 1 capital of around 16% for US companies,” the BoE said.

American banks have led an intense lobbying campaign against the Federal Reserve’s proposals regarding the implementation of the Basel Accord.

The rules published today implement the latest Basel standards in the UK and include appropriate adjustments to take into account the points raised by respondents to our consultation,” Sam Woods, deputy governor of the BoE, said in a statement.

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