Don't let banks exempt UK govt bonds from capital requirements, PRA's Woods says
By Sofia Gerace ( October 22, 2025, 20:00 GMT | Insight) -- The head of the UK’s prudential watchdog warned that it would be “highly risky” to allow banks to exclude highly rated government bonds from their leverage ratio calculations. “It would risk forgetting one of the main lessons from the 2023 banking failures — that even bonds issued by sound governments, if liquidated in size, can pose serious risks to banks’ balance sheets due to interest rate risk,” Sam Woods told industry and regulators.The head of the UK’s prudential watchdog Sam Woods has warned that it would be “highly risky” to allow banks to exclude highly rated government bonds from their leverage ratio calculations. ...
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