BoE to re-examine capital requirements for banks after Brexit

The Bank of England will re-examine its capital requirements for banks after the referendum on Britain’s membership in the European Union on 23 June, the central bank revealed on Tuesday.

A record of the BoE Financial Policy Committee's March 23 meeting showed a majority of policymakers supported raising the mandatory banking capital buffer to an extra 0.5% of assets by March 2017. The decision to take this action was announced last week.

Other policymakers agreed to back off their call for it to rise to 0.75%, vowing to look into it again at the June meeting.

A minority of members initially wanted to move faster towards the target agreed in December for an extra capital buffer of 1% to protect banks from the shocks of another financial crisis.

"The FPC would review again the appropriate setting of the CCyB (buffer) at its next meeting in June, when it would have more information on the impact of tax changes on the buy-to-let market and the results of the EU referendum would be known," the BoE said.

The BoE also reiterated that a possible Brexit would threaten financial stability, due partly to further depreciation of sterling and the impact on the cost and availability of financing for a broad range of UK borrowers.