Regulator set to postpone UK bank capital reforms until at least January 2026

The UK’s main banking regulator is reportedly planning to delay the latest series of bank capital reforms as it monitors how the rules are developing in the US.

The Bank of England’s Prudential Regulation Authority (PRA) is set to delay its entire Basel 3.1 package until at least January 2026, with an official announcement expected in the coming days, Bloomberg News reported.

It is said that the decision was partly driven by May’s general election announcement forcing regulators into a “quiet period” that meant they could not publish detailed measures in time to give banks a full year’s notice of the rules.

The Bank declined to comment when approached by City A.M.

Separately, it announced on Thursday that the PRA would publish its second and final set of near-final Basel 3.1 rules on 12 September.

Basel III, known as Basel 3.1 in the UK, was introduced in 2017 by the Basel Committee on Banking Supervision – a group of central banks from 28 countries.

It is the latest in a series of Basel Accords rolled out in the wake of the 2008 financial crisis.

The timeline for implementation has been delayed several times by the UK, EU and US. The Bank of England previously altered its schedule in line with the June 2025 timetable announced by the US last year.

Basel III has become hotly contested in the US as its regulators propose a regime stricter than the globally-agreed standard, leading some banks to threaten lawsuits.

The rules are expected to hit banks’ profitability while raising capital levels, stoking fears over a decline in the sector’s competitiveness and contribution to economic growth.

The EU has only delayed part of the rules that deal with banks’ trading businesses, while Switzerland has stood by a January 2025 implementation date. Japan introduced the measures in March this year.