UK watchdog sets out bank capital standards

LONDON, Nov 29 (Reuters) - Britain's banking regulator saidon Friday that major lenders and building societies must hold acore capital buffer equivalent to 7 percent of theirrisk-weighted assets from January 2014.

The Bank of England's Prudential Regulation Authority alsosaid in a statement that the same institutions must also complywith a leverage ratio of 3 percent from the same date. This is ameasure of capital in proportion to a bank's total assets on anon-risk weighted basis.

The PRA said it was announcing key decisions on bank capitalstandards ahead of the introduction of new European Union rulesnext year.

"These decisions will enhance the stability of the financialsector and strengthen the capital regime in the UK," the PRAsaid.

"Although the PRA has not finalised all aspects of therules, it is setting out a number of key decisions in order togive firms clarity on the key policy issues that affect theminimum level of common equitytier 1 (CET1) capital which firmsneed to maintain," the PRA said.