UK Delays Basel 3.1 Banking Reforms to 2027

This postponement aims to provide additional time for clarity on the rollout of similar reforms in the United States.

Basel 3.1 represents a comprehensive suite of international banking reforms established to enhance financial stability in the aftermath of the 2008 global financial crisis. The framework seeks to improve how banks measure risk and standardises capital ratios to facilitate comparability across institutions.

Originally, the PRA had intended to implement these standards from 1 January 2026, following the publication of near-final rules in its PS9/24 document on 12 September 2024. However, after assessing feedback from consultations and the evolving implementation timelines in other jurisdictions, a six-month delay was enacted.

The PRA’s latest decision to push the implementation back further is largely influenced by the ongoing uncertainty regarding the US’s timeline for adopting similar regulations, alongside considerations surrounding the competitiveness and growth of the UK banking sector. 

While the full adoption of Florence 3.1 standards is now expected to remain consistent with previous plans—to be fully implemented by 1 January 2030—the transitional periods for firms have been adjusted to accommodate the changes.

In relation to these recent developments, the PRA has also announced the suspension of its data collection exercise intended to revise firm-specific Pillar 2 capital requirements, originally due by 31 March 2025. 

Furthermore, the timeline for joining the Interim Capital Regime, which was previously set to end on 28 February 2025, is also under revision, with additional details expected to be released by the PRA in the near future.