News release
The Prudential Regulation Authority (PRA), in consultation with HM Treasury, has decided to delay the implementation of Basel 3.1 in the UK by one year until 1 January 2027. This allows more time for greater clarity to emerge about plans for its implementation in the United States.
Basel 3.1 is the final set of international banking reforms designed in response to the 2008 global financial crisis. It is designed to improve banks’ own measurement of risk, standardising approaches between firms to make their capital ratios more consistent and comparable.
On 12 September 2024, the PRA published PS9/24 – Implementation of the Basel 3.1 standards near-final part 2footnote [1] – which set out its near-final rules to implement Basel 3.1 in the PRA rulebook. The publication delayed the implementation date by six months to 1 January 2026 based on consultation feedback and the PRA’s ongoing monitoring of the implementation timelines of other jurisdictions.
Given the current uncertainty around the timing of implementation of the Basel 3.1 standards in the US, and taking into account competitiveness and growth considerations, the PRA, having consulted with HM Treasury, has decided to further delay implementation of the rules. We now expect to implement on 1 January 2027, but will continue to monitor developments. In line with the approach taken for the six-month delay in PS9/24, the transitional periods in the rules will be reduced to ensure the date of full implementation remains at 1 January 2030, as set out in the original proposalsfootnote [2].
As part of the preparatory work to implement Basel 3.1, the PRA had indicated that it would conduct a firm data collection exercise to inform an off-cycle review of firm-specific Pillar 2 capital requirements so that they could be updated at the same time as the implementation of Basel 3.1 standards. The stated deadline for firms to submit the data for the collection exercise was 31 March 2025. In light of the delay to implementation, we are immediately pausing this data collection exercise until further notice.
Also in light of the delay to implementation, the end-date of the time-window to join the Interim Capital Regime – previously set as 28 February 2025 – will be moved back. The PRA will provide further information in due course.