On 15 November 2021, the Bank of England issued a consultation on the Financial Policy Committee’s (FPC) framework. The consultation is relevant to PRA-regulated ring-fenced banks and large building societies that are subject to the other systemically important institutions (O-SII) buffer.

The consultation sets out proposals to amend the FPC framework as follows:

  • To change the metric used to determine O-SII buffer rates from total assets to the UK leverage exposure measure.
  • To recalibrate the thresholds used to determine O-SII buffer rates to prevent an overall tightening or loosening of the framework relative to its pre-COVID 19 level.

The deadline for comments on the proposals is 15 February 2021.

If the proposals are adopted, the changes would come into effect in time for the PRA to assess rates under a revised framework in December 2023, based on end-2022 financial results. Rates set in 2023 would then apply from January 2025.