Bank of England Sets New Buffer Requirement for U.K. Lenders
- BOE says rule implies ‘only very small’ capital increase
- Systemic risk buffer aims to ensure banks can lend after shock
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Lloyds Banking Group Plc, Nationwide Building Society and other major U.K. retail lenders face new regulatory-capital requirements as the Bank of England moves to ensure the industry can keep credit flowing under stress.
The central bank’s Financial Policy Committee on Thursday said it set the so-called systemic risk buffer at zero percent for lenders with total assets of less than 175 billion pounds. The level rises in increments of 50 basis points to as much as 2.5 percent of risk-weighted assets for the largest firms currently. The requirements will have “only a very small increase in capital at the system-wide level,” the BOE said, releasing the final version of the regulation.