Banks face 6% capital hike from remaining Basel rules, says Bank of England

LONDON (Reuters) -Applying the remaining set of global bank capital rules in Britain will increase capital requirements by about 6% by the end of the decade, the Bank of England said on Wednesday.

The initial batch of Basel III rules from the Basel Committee of banking regulators from the world’s main financial centres, were rolled out in the aftermath of the global financial crisis over a decade ago when taxpayers had to bail out undercapitalised lenders.

The final batch, which the BoE calls Basel 3.1, will be implemented from January 2025, after a public consultation now underway, affecting lenders like HSBC, Barclays, Lloyds and NatWest.

BoE director Phil Evans said given Brexit allows Britain to write its own financial rules, the consultation is a landmark event that will take account of Britain’s competitiveness while aligning with strong international standards.

Evans said Basel 3.1 will increase capital requirements for banks by about 6%.

“All in all, the impact will be limited until the mid-to-late 2020s, and by 2030 and full phase in we think that Basel 3.1 will increase capital requirements by a small amount on average across UK firms,” Evans told a UK Finance event.

It was difficult to put a precise figure for now given some factors will push the impact down, he said.

“And we’re giving firms plenty of time to adjust,” he said.

(Reporting by Huw Jones, Editing by Louise Heavens)