Bank of England waters down plans to impose tougher capital rules on UK banks

Rachel Reeves at the Bank of England HQ in London. The Treasury said the changes to the capital rules would help support Labour’s growth plans. Photograph: Stefan Rousseau/PA

The Bank of England has watered down new capital rules meant to shock-proof the banking system from another 2008-style crash, in a move the Labour government says will bolster its economic growth plans.

The regulator said it had made “substantial changes” to earlier proposals, meaning UK banks would not have to set aside as much money for capital buffers as previously planned. Capital buffers provide a financial cushion against risky lending and investments on bank balance sheets.