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The Bank of England has delayed the start of new capital rules for British banks by a year while it waits to see how the incoming Trump administration will implement the global Basel agreement in the US.
The announcement by the BoE’s Prudential Regulation Authority on Friday that it would postpone the start of the stricter capital regime in the UK until January 2027 underlines how regulators around the world are nervously watching to see what impact Trump will have on financial regulation.
The Basel III regime was first drawn up more than a decade ago to increase the amount of equity available to absorb stress in banks and to avoid a repeat of the state bailouts that followed the 2008 financial crisis.
The PRA had already said last year it was modifying the so-called Basel 3.1 rules to reduce the extra capital required for British banks and to delay the implementation until January 2026.
The US Federal Reserve also watered down its plans for applying its so-called Basel Endgame rules on American banks after heavy lobbying by the sector. The regulations are expected to be further diluted or even abandoned under the Trump administration.
In a statement, the PRA said: “Given the current uncertainty around the timing of implementation of the Basel 3.1 standards in the US, and taking into account competitiveness and growth considerations, the PRA, having consulted with HM Treasury, has decided to further delay implementation of the rules.”
Shares in UK banks rose at the open on Friday morning, with Barclays up 1.7 per cent, Lloyds up 1.2 per cent and NatWest up 1 per cent.
