On Jul. 3, 2025, UK PRA issued policy statement PS8/25 setting out its final policy in relation to amendments being made to the UK framework on capital buffers.
PRA received one response to its consultation, which supported the proposals set out, and so the analysis as presented in the consultation paper remains unchanged.
PS8/25 includes new Statement of policy (SoP) The PRA's approach to identifying Global Systemically Important Institutions (G-SIIs) and setting G-SII buffers.
Amendments to SoPThe PRA's approach to identifying other systemically important institutions (O-SIIs); amendments to SoPThe PRA's approach to the implementation of the O-SII buffer; reporting instructions for identifying/assigning G-SII buffer rates.
PRA Standards Instrument: The Technical Standards (specification of the methodology for the identification of G-SIIs Instrument 2025, comes into force on Jul. 31, 2025.
The policy material set out PS8/25 comes into effect on Jul. 31, 2025.
On Sep. 12, UK PRA proposed to streamline buffers policy material.
PRA published consultation paper (CP) 10/24, Updates to the UK policy framework for capital buffers, issued as part of wider package of proposals on bank capital.
On same date UK PRA issued package on Basel 3.1 and bank capital, see #226066.
On same day UK PRA issued near final rules on Basel 3.1 standards, see #226103.
At same time UK PRA proposed small domestic deposit takers' regime, see #226241.
Simultaneously UK PRA proposed to restate CRR requirements as rules, see #226266.
Additionally UK PRA proposed streamlined Pillar 2A capital framework, see #226250.
On same date UK Treasury issued bank prudential framework legislation, see #226296.
Background
The Capital Buffers Regulations (CBR) is piece of assimilated law retained from EU.
Sets out statutory framework for Countercyclical Capital Buffer (CCyB), Capital Conservation Buffer (CCoB), Global Systemically Important Institutions (G-SII) buffer, Other Systemically Important Institutions (O-SII) buffer, Systemic Risk Buffer (SRB).
PRA and UK FPC implement these in line with their responsibilities under CBR.
UK Treasury and PRA are proposing amendments to the UK framework on capital buffers, would result in some regulatory material on UK capital buffers framework being removed from the statute book and replaced by PRA policy material.
Proposals
CP10/24 sets out PRA's proposals to streamline some of its policy materials on capital buffers as part of this process, in order to enhance their usability and clarity.
Include consequential amendments to, and streamlining of, PRA statements of policy (SoPs), PRA rules that refer directly to the current CBR, and UK Technical Standards (UKTS), PRA is not proposing changes to policy approach on buffer implementation.
Paper proposes revocation of the UKTS on the methodology for identification of G-SIIs.
Introduction of a new SoP setting out PRA's approach to G-SII identification and buffers, to replace aforementioned UKTS and relevant provisions to be revoked in CBR.
Minor amendments to existing SoPs on O-SII designation and O-SII buffer setting to reflect proposed amendments to CBR; minor consequential amendments to PRA rules.
CP10/24 does not contain any proposed policy changes, aims to make policy clearer.
In parallel, UK Treasury is publishing draft statutory instrument which proposes further amendments to other parts of CBR, including the CCyB, CCoB, and SRB.
These amendments propose transfer of responsibilities to the PRA, including setting the scope of application of CCyB and CCoB, PRA issued other bank capital proposals.
Effectiveness
The closing date for submission of responses to the consultation is Dec. 12, 2024.
PRA proposes that implementation date for changes resulting from the consultation will be the date the new statutory instrument comes into force, expected to be Q2 2025.
In Jan. 2025, UK PRA delayed implementing Basel 3.1 in UK to Jan. 1, 2027, #226103.
In Jun. 2025, UK Treasury issued buffer, macro-prudential measures, see #257564.
Jul. 2025 Final Policy
On Jul. 3, 2025, UK PRA issued policy statement PS8/25 setting out its final policy in relation to amendments being made to the UK framework on capital buffers.
PRA received one response to its consultation, which supported the proposals set out, and so the analysis as presented in the consultation paper remains unchanged.
PS8/25 includes new Statement of policy (SoP) The PRA's approach to identifying Global Systemically Important Institutions (G-SIIs) and setting G-SII buffers.
Amendments to SoPThe PRA's approach to identifying other systemically important institutions (O-SIIs); amendments to SoPThe PRA's approach to the implementation of the O-SII buffer; reporting instructions for identifying/assigning G-SII buffer rates.
PRA Standards Instrument: The Technical Standards (specification of the methodology for the identification of G-SIIs Instrument 2025, comes into force on Jul. 31, 2025.
