A weekend meeting by the Basel III committee ended with regulators agreeing banks will have to increase capital provision to 7%, up from the current 2%.
Despite the stark increase, the changes will not have to be implemented until 2015, boosting financial stocks in early morning trading.
RBS was 3.44% higher to 50.2p while Lloyds advanced 3.05% to 77.93p. However, Prudential was the biggest riser, up 4.25% to 625p, on news Chinese investors are eying the insurer.
The biggest faller was Associated British Foods, down 2.48% to £10.61, despite revealing it expects underlying results this year to be well ahead of last time as clothing business Primark continues to power ahead.
Meanwhile, Chinese data showed industrial production jumped a better than expected 13.9% year on year in August, calming fears about the global slowdown.
On Wall Street, the Dow Jones gained 0.46% or 47.53 points to 10,462.77 as US wholesale inventories surged by the largest amount in two years in July.
In Japan, the Nikkei 225 climbed 0.89% or 82.65 points to 9,321.82 after more upbeat data from China and the US helped soothe investor worries that global economic growth would slow.
