Small firms call for capital rules rethink The Bank of England could reconsider an overhaul of capital rules that critics warn will undermine growth by cutting off funding to SMEs. It has been suggested that the Prudential Regulation Authority could rethink planned reforms to the capital treatment of small business loans, acting on concerns that the proposals could reduce the availability of credit and make loans more expensive. Oxera, a consultancy commissioned by Allica Bank, has warned that the plans could reduce small business lending by up to £44bn and may increase capital requirements for small banks by a third. The Federation of Small Businesses said the reforms – which come as part of a broader package intended to improve the resilience of banks - could “compromise the ability of SMEs to scale up and create jobs.” The British Chambers of Commerce and the Institute of Directors have also expressed concerns about the plans.