On 28 March 2025, the Financial Policy Committee (FPC) issued a consultation paper setting out proposals intended to ensure that the other systemically important institutions (O-SII) buffer continues to address financial stability risks in line with the FPC’s risk appetite, as set out in its framework, while also avoiding any undue tightening over time.

In the consultation paper the FPC proposes to:

• Index the O-SII buffer thresholds based on the cumulative growth in nominal GDP between 2019 and 2023. The FPC proposes to increase O-SII buffer thresholds based on the 20% cumulative growth in nominal GDP between 2019 and 2023 to ensure the framework reflects the original risk appetite of the Committee. If the FPC decides, following this consultation, to confirm these proposed changes to the O-SII buffer thresholds in its final policy, the Prudential Regulation Authority (PRA) will reissue the 2024 O-SII buffer rates to reflect the changes. This will ensure that firms benefit from the increased thresholds without delay. The reissued rates would apply from 1 January 2026.

• Assess the thresholds as part of the FPC’s regular review of the framework in the future and update them in line with nominal GDP growth, as appropriate. To ensure firms can benefit from any such threshold adjustments immediately, future indexation will be communicated through the FPC Record without further consultations. The updated thresholds will then be used by the PRA for its subsequent O-SII buffer rate setting, in line with its statement of policy.

Next steps

The deadline for comments on the consultation paper is 30 May 2025.