UK Lenders Slam Bank of England Over 'Punitive' Software Capital Rules

UK lenders have accused the Bank of England's Prudential Regulation Authority (PRA) of ignoring Wall Street's $950 billion capital edge.

The dispute centers on the regulatory treatment of software investments, which are deducted from British banks' balance sheets at a rate of £5.5 billion per year.

This strict stance is hamstringing UK lenders' ability to compete in global syndicated loan markets, directly impacting their capacity to finance emerging market infrastructure.

The PRA insists on full capital deduction for software assets, treating proprietary trading algorithms and core banking infrastructure as having zero recoverable value in the event of a bank liquidation or financial stress.