# Bank of England to loosen post-financial crisis capital rules for banks

By Matt Britzman — 2025-12-02

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “The UK’s seven biggest banks sailed through the latest stress test, reaffirming their resilience and earning a regulatory nod to ease capital buffers.

“Most banks already hold capital well above the minimum by choice, so any shift in strategy may take time – but in theory, it frees up extra capital for lending or capital returns.

“However they use the new freedom, this is another clear signal that the UK banking sector is in robust health.

“This was largely expected, but the confirmation should still be taken well, especially after dodging tax hikes in last week’s Budget.

“UK banks have been on a tear over the past two years from deeply depressed levels – valuations aren’t as cheap anymore, but there are still some solid catalysts in play and the potential for strong shareholder returns ahead.”

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