Market News
BoE delays Basel bank trading rule to 2028 - REUTERS
Summary
- BoE delays trading rule to 2028, sticks with 2027 for rest of Basel
- Central bank also eases capital rules for mid-sized banks
- Deadline shift comes as other jurisdictions delay Basel rules
- UK finance minister to address City of London later
LONDON, July 15 (Reuters) - Britain's central bank on Tuesday delayed implementing a key part of new, global rules governing banks' trading activities by a year to 2028, as it waits for clarity on what other jurisdictions including the United States will do.
As part of a series of changes unveiled to help British lenders, the Bank of England also announced an easing of capital requirements for mid-sized banks, a change that had been expected.
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The announcements follow calls from the Labour government for regulators to replace a risk-averse stance with one that supports financial sector growth. UK Finance Minister Rachel Reeves on Tuesday also announced a plan to rein in regulators and get more savers investing in shares to boost the financial services industry and the economy.
The BoE said it would stick with a January 2027 implementation date for most of the Basel 3.1 rules but that it would postpone part of the rules known as Fundamental Review of the Trading Book (FRTB) to 2028.
The FRTB governs capital and reporting requirements relating to banks' trading assets, crucially including how risk should be measured using a standard method or banks' own calculations.
The BoE said it had proposed delaying implementation of the internal models approach to give firms more time to prepare and given "continued uncertainty" over implementation elsewhere.
"Today's announcements will give certainty to firms of all sizes about the future capital framework ... and allow an extra year for part of the implementation of new investment banking rules," Bank of England Deputy Governor Sam Woods said.
Supervisors globally have been delaying the full implementation of banking reforms known as Basel 3.1 to avoid burdening their own companies with extra rules before other countries have introduced them and to get a better understanding of what the United States would do under Donald Trump after the president pledged to deregulate.
The BoE said in January it was delaying the broader Basel rules by a year to January 2027, which prompted the European Union to say it would consider its options. A few months later the EU delayed implementation of its FRTB rules until 2027.
