UK banking regulator sets out capital standards
The Prudential Regulation Authority (PRA) announced on Friday that major banks and building societies will be required to have a core capital buffer equivalent to seven per cent of their risk weighted assets from January 2014, as well as comply with a leverage ratio of three per cent.
The PRA said in a statement:
The Prudential Regulation Authority (PRA) is announcing key decisions on capital standards ahead of the introduction of a new European capital regime next year. These decisions will enhance the stability of the financial sector and strengthen the capital regime in the UK.
While not all aspects of the rules have been finalised, the PRA is announcing the decisions so as to give firms clarity on policy issues that affect the minimum level of common equity tier capital which firms have to maintain.