The Bank of England (BoE) will launch a review into whether it should have more power over leverage ratios - a key way of limiting the size of balance sheets - at U.K. banks.
Speaking in front of the Treasury Select Committee of British lawmakers on Tuesday, BoE Governor Mark Carney said leverage ratios - which are the ratio of equity to debt - were "integral to the capital framework of banks."
The former Governor of the Bank of Canada added: "If I could pick one element that was essential to the performance of the Canadian banking system during the crisis it was the presence of a leverage ratio."
"We see that this power is consistent and in fact necessary to properly implement a robust capital framework in the United Kingdom."
His comments came after an exchange of letters between Carney and British Chancellor George Osborne, who requested that the BoE's Financial Policy Committee (FPC) carry out the review.
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"Now is an appropriate time for the FPC to consider whether and when it needs any additional powers of direction over the leverage ratio, how it should use these powers and how any new powers would fit in with the rest of its macro-prudential 'tool-kit'," Osborne wrote.
He added that "much greater certainty on the medium term capital framework for U.K. banks" was needed.
At the moment, the FPC - which oversees the regulation of the U.K. financial system - is not able to change the leverage ratio. The committee will provide a report into the issue within 12 months, Carney said.
Details of the leverage ratio are due to be agreed internationally by the Basel Committee on Banking Supervision early in the New Year, and will become mandatory on January 1, 2018. However, Osborne wrote that he was open to the possibility that the FPC may need the power to implement a ratio ahead of this time frame.
The review comes amid much uncertainty at British banks about what capital ratios will be required. A source at one bank, who did not want to be named, said their bank had prepared for five different scenarios to be announced.
Mike Trippitt, banks analyst at Numis Securities, told CNBC: "There are some scenarios where it could be as high as 13 percent, but I think that's far-fetched."
"It feels like the Royal Bank of Scotland gave us the answer when it announced the bad bank, with a 12 percent ratio," he added.
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Leverage ratios are part of a wider set of banking reform measures - known as Basel III - which is due to come into effect at the start of 2019.
It aims to strengthen the banking industry following the financial crisis of 2008 which saw a number of big banks – such as Lehman Brothers – collapse. Many others received state aid after being deemed "too big to fail" – meaning that if they went under they would significantly damage the wider banking industry and economy.