The Bank of England's upcoming review of bank leverage rules could provide a significant boost to Britain's government bond market and reduce the government's borrowing costs by more than £1 billion annually, according to banking industry estimates. However, some former regulators have cautioned that easing the rules could weaken financial safeguards and increase risks within the banking system, Reuters reported.
The central bank is expected to provide an update on its review of leverage requirements in its half-yearly Financial Stability Report on Tuesday. The review comes after the Bank of England eased its primary capital requirements in December and follows similar regulatory relaxation in the United States, which intensified competitive pressures on British banks, according to Reuters.
