UK small lenders to avoid leverage ratio ratchet

Key facts

• The Bank of England plans to automatically adjust regulatory thresholds for lenders.
• This move is expected to remove uncertainty in capital planning for small UK banks.
• Andrew Turvey, chief risk officer at Dudley Building Society, has advocated for this change for over a decade.

The Bank of England's intention to implement an economic indexation of prudential thresholds is poised to ease capital planning for smaller UK lenders, according to industry sources. This commitment to automatically adjusting regulatory thresholds is anticipated to eliminate uncertainty for these institutions.

Andrew Turvey, chief risk officer at Dudley Building Society, expressed strong support for the proposed change, stating it is a "logical fix" that should have been in place for over a decade. Dudley Building Society is identified as a UK lender.