In 2025, the UK’s Financial Policy Committee (FPC) reviewed its assessment of the appropriate capital requirements for the UK banking system. In December 2025, the FPC confirmed that it now judges the appropriate benchmark for the system-wide level of Tier 1 capital requirements to be 1 percentage point lower than it had been previously, at around 13% of RWAs. At the same time, the FPC considered whether aspects of the capital framework required adjustment and this review is ongoing.
AFME has developed extensive proposals to inform the FPC’s review and the work of the UK Prudential Regulation Authority. We emphasise that a reduction in requirements is needed to support sustainable growth, to improve the overall alignment of capital with risk, and to enhance the UK’s international competitiveness. Action should be taken across the prudential framework to deliver comparable effects for all business models, avoiding competitive distortions.