The FTSE 100 rose 0.88% or 48.58 points to 5,550.22 boosted by new financials regulation and positive economic data from China.
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.
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till