On 28 July 2023, the Bank of England (BoE) published Consultation Paper CP16/23: Updating UK technical Standards on the identification of global systemically important institutions (G-SIIs) (CP16/23).
The Basel Committee for Banking Supervision (BCBS) implemented changes in 2022 to its framework for assessing the systemic importance global systemically important banks.
This Consultation Paper sets out the Prudential Regulation Authority’s (PRAs) proposed updates to the UK methodology for the identification of, and setting of a capital buffer, for G-SIIs, to be in line with the BCBS framework.
The proposals in this CP would result in changes to the UK Technical Standards (the UKTS) for the methodology used to identify G-SIIs. This CP sets out policy proposals to align the UKTS with updates made to the BCBS framework.
The PRA’s proposals aim to maintain the alignment of the UKTS with the BCBS framework. Identifying and setting an additional capital buffer for G-SIIs in accordance with the BCBS methodology developed at international level advances the PRA’s primary safety and soundness objective. It does this by helping to ensure G-SIIs hold appropriate levels of capital, in line with the greater costs of their distress or failure to the financial system and economy. Ensuring consistency with the BCBS framework also provides clarity to firms and avoids incurring any duplicative operational costs for firms and the PRA.
The PRA proposes that the implementation date for the changes resulting from this CP would be the date of publication of the final revised UKTS.
The deadline for feedback to this consultation is 29 August 2023.