The UK’s largest banks may face higher capital requirements under Bank of England rules on the separation of retail operations from riskier investment banking.
The BOE’s Prudential Regulation Authority estimates that so-called ring-fencing could mean an additional capital requirement of 2.2 billion pounds to 3.3 billion pounds by 2019, when the rules kick in.
The move is aimed at ensuring that financial services crucial to the U.K. economy, such as deposit-taking, payments and overdrafts, will be protected if riskier units incur losses and have to be shut down.
The additional burden is due to the protected unit being measured on a standalone basis for its capital needs. In addition, any transactions between the ring-fenced unit and other parts of the institution will be classed as third-party deals, meaning capital will have to be held against them.
“The PRA recognizes that applying this approach may result in increased capital requirements for some firms,” it said in a consultation paper published in London on Thursday.
Full content: The Financial Times
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
Featured News
Court Order Temporarily Halts U.S. Consumer Financial Protection Bureau Layoffs
Feb 16, 2025 by
CPI
Nokia Poised to Gain EU Approval for $2.3 Billion Infinera Acquisition
Feb 16, 2025 by
CPI
Turkey Fines Frito-Lay in Antitrust Crackdown
Feb 16, 2025 by
CPI
Advances Bill to Strengthen Antitrust Enforcement Through AI
Feb 16, 2025 by
CPI
Intel Faces Potential Breakup as Broadcom and TSMC Explore Deals
Feb 16, 2025 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – International Criminal Enforcement
Jan 23, 2025 by
CPI
The Antitrust Division’s Recent Work to Combat International Cartels
Jan 23, 2025 by
Emma Burnham & Benjamin Christenson
Information Sharing: The New Frontier of U.S. Antitrust Enforcement
Jan 23, 2025 by
Brian P. Quinn, Casey Kovarik & Michael Tubach
The Key Role of Guidelines on Exchanges of Information Among Competitors and the Divergent Transatlantic Paths
Jan 23, 2025 by
Rosa Abrantes-Metz & Albert Metz
Leniency, Whistleblowers, and Compliance
Jan 23, 2025 by
Richard Powers, Tara O’Malley & Cory Gordon