The UK has eased its timetable for implementing the latest global bank capital standards, but stopped short of the 2-year delay recently announced by the EU.
In its twice yearly update on regulatory initiatives, the UK said it would implement the latest Basel III banking standards “post March 2023”, without specifying a date.
The rules, which mostly streamline how banks calculate their capital, were due to come into force globally on January 1 2023. The EU is now aiming for implementation in 2025.
In September, a senior Bank of England official warned that the UK’s work on the final Basel III package had been “somewhat delayed” by the pandemic.
The impact of the rules on the UK’s industry is unclear because regulators have not yet detailed how they will deal with some crucial issues, where national authorities have discretion.
One of these is the amount of capital banks have to set aside for potential defaults among corporate clients who do not have a rating from a credit-rating agency.
The Bank of England is now set to publish a consultation paper on Basel III in the second half of 2022. It was due to publish that consultation paper in the final quarter of 2021.
