The Bank of England is preparing to water down changes to its post-crisis rulebook after lenders warned plans to raise bank buffers will strangle small businesses and harm the economy.
It is understood that regulators are examining ways to lower the burden on banks when the UK adopts new international capital rules from 2025.
The Prudential Regulation Authority (PRA) published a consultation in November that suggests British lenders will be forced to hold back billions of pounds more than their EU rivals because of the UK’s strict adoption of the rules.
While the PRA is still insisting on a robust implementation, regulators are seeking a “middle ground” on small business lending involving a transition period from the current framework.
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