EU, Bank of England Ease Capital Rules as U.S. Cuts Spur 2.4% Bank Relief
Updated
Updated · POLITICO · Jul 22
EU, Bank of England Ease Capital Rules as U.S. Cuts Spur 2.4% Bank Relief
3 articles · Updated · POLITICO · Jul 22
Summary
The European Commission and Bank of England have moved to loosen bank capital rules, marking Europe’s clearest shift yet toward lighter regulation after U.S. changes.
Last week, the Commission proposed tweaks to boost competitiveness, including easier standards for smaller banks and simpler capital buffers, with related legislation expected in 2027.
Earlier this month, the Bank of England said it would make it easier for banks to use capital buffers in stress periods and plans to lower a key capital requirement.
The push mirrors Washington’s drive to unlock lending: U.S. regulators in March proposed cutting capital requirements by a combined 2.4% for the biggest banks and dropping the Basel output floor.
Critics warn the trans-Atlantic easing could become a race to the bottom that helps lending and competitiveness now but weakens global financial stability.