Britain's biggest banks could see their capital rules eased this week, when the Bank of England sets out the next stage of a review that could free up cash for lending and shareholder returns.
The central bank's Financial Policy Committee publishes its half-yearly Financial Stability Report on Tuesday at 10.30 am, with a press briefing to follow later in the day.
Attention will focus on two technical measures that determine how much loss-absorbing capital lenders must hold against their assets.
The first is the common equity tier one ratio, a core gauge of a bank's financial strength relative to its risk-weighted assets.
The second is the leverage ratio, a simpler backstop that measures capital against total assets regardless of how risky they are.
Expectations are rising that the committee will float fresh proposals on both, following a series of consultations launched late last year.
Any changes are likely to be marginal, but on balance helpful for the industry.
On the leverage ratio, NatWest Group PLC (LSE:NWG) and Lloyds Banking Group PLC (LSE:LLOY) are best placed to gain from any tweak to how core capital is composed, according to research by Citi.
Santander UK and Barclays PLC (LSE:BARC) could benefit most from changes to the leverage framework itself, the US investment bank said.
The review gained urgency after the United States relaxed its own leverage requirements in November, increasing competitive pressure on British lenders.
Barclays has lobbied for the Bank to stop counting UK government bonds towards the leverage ratio, which currently requires capital worth somewhat above 3.25% of assets.
The leverage measure was designed as a backstop, but has become the binding constraint for three of Britain's seven largest banks as their risk-weighted assets have fallen.
In December, the committee lowered its recommended system-wide tier one benchmark to 13% from around 14%.
UK banks remain well capitalised, with aggregate core capital of 14.6%, leaving ample headroom above regulatory minimums.
