Bank of England revamps discretionary capital rules for banks

LONDON, July 29 (Reuters) - The Bank of England is revamping how it requires banks to hold capital above the mandatory minimum requirements in order to be more transparent and better tailored to the risks covered.

The BoE's Prudential Regulation Authority, which supervises banks, said in a statement it was creating a new "PRA buffer" that will be held by banks to absorb losses that may arise under a severe, but plausible stress.

Where the PRA assesses a firm's risk management and governance to be significantly weak it may also set the PRA buffer to cover the risk posed by those weaknesses until they are addressed.

"Firms must hold adequate capital to support the risks in their business, ensuring financial stability and continuity in the provision of key services to the wider economy," PRA Chief Executive, Andrew Bailey, said in a statement on Wednesday. (Reporting by Huw Jones, editing by Carolyn Cohn)