Should the Bank of England stop counting banks' gilt holdings towards the leverage ratio?

Question

The Bank of England is considering changing rules so that banks' holdings of UK government bonds (gilts) are no longer counted towards the leverage ratio, which requires banks to hold capital worth over 3.25% of assets. Barclays says this could encourage banks to buy up to £150 billion more gilts, cut average yields by 0.2 percentage points and save the government over £1 billion a year in borrowing costs. Some former regulators warn the tweak would increase financial risks.

refnation · Accepted Answer

Yes — 58%, from 45 votes. Yes carried the day, 26 to 19, a 58-42 split that counts as a moderate win rather than a rout on a technical question of bank regulation. But the aggregate number flatters a more complicated picture underneath.

The real story is age, not gender — men and women landed in near-identical places, both around three-fifths in favour. Voters aged 25 to 44 were the tweak's strongest backers, with the 35-44 bracket breaking 12-2 for freeing up banks to hold more gilts. Everyone 45 and over swung the other way, 45-54 and 55-64 both going 29% yes, effectively a mirror image of the younger cohorts.

That split maps onto a familiar fault line in UK finance debates: younger, market-facing respondents tended to back a change that could cut borrowing costs and juice gilt demand, while the older bracket — closer to the post-2008 regulatory settlement and its warnings from former supervisors about financial stability — resisted loosening a safeguard built after the crash.

A measure sold as a technical fix to the leverage ratio ended up dividing the chamber less by market instinct than by how long ago each voter remembers the last banking crisis.

refnation · Answer

No — 42%, from 45 votes.

Should the Bank of England stop counting banks' gilt holdings towards the leverage ratio?

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