The delay and deferral of the implementation of the post-financial crisis reform to global capital rules for banks is continuing, with the U.K. Prudential Regulation Authority’s (PRA) decision to delay its pending reforms to 2027.
Citing the need for more time to assess the direction that U.S. bank regulators take on the final edition of the capital rules, known as Basel III, the PRA said it has decided to delay implementation of its remaining measures by another year to Jan. 1, 2027.
Last September, the PRA announced a six-month delay to the final adoption of reforms that — among other things, aim to improve banks risk measurement and to make banks’ capital ratios more consistent and comparable — to Jan. 1, 2026.
That first delay was meant to give the U.K. more time to monitor the implementation timelines of other jurisdictions.
“Given the current uncertainty around the timing of implementation of the Basel III standards in the U.S., and taking into account competitiveness and growth considerations, the PRA … has decided to further delay implementation of the rules,” it said on Friday.
“We now expect to implement on Jan. 1 2027, but will continue to monitor developments.”
Last summer, Canada’s Office of the Superintendent of Financial Institutions (OSFI) also delayed some of its own reforms, citing competitive concerns, amid delays in Basel III reforms by regulators in Europe and the U.S.
It’s widely expected that the new U.S. administration may further pare back, or delay, changes to bank capital rules that were finalized last year.
“… regulators are signalling a more relaxed regulatory posture that could be credit negative, subject to finalization and implementation,” said Fitch Ratings in a recent report.
Given its latest delay, the PRA also said it would defer a planned data collection exercise that was scheduled for the first quarter of 2025 to examine the impact of the new requirements to banks’ capital positions. It didn’t announce a new schedule for that work.