Bank of England Governor Andrew Bailey said on Tuesday it would be inappropriate to exclude government bonds from banks' leverage ratios, rejecting an idea floated by some in the financial sector to ease their regulatory burden.
"No country exempts government debt from its leverage ratio that I am aware of, certainly, and it would be inconsistent with the Basel agreement to do that," Bailey told reporters after the BoE published its latest Financial Stability Report.
"So I really don't think that is an issue at the moment. I know the hopes were up, as it were, in some quarters — but that is not, I think, an appropriate issue."
Barclays LSE:BARC, with over 20 million UK customers, had called on the BoE to stop counting banks' holdings of British government bonds, known as gilts, towards a leverage ratio which requires banks to have capital to help cover any losses.