On 6 February 2024, the Payment Systems Regulator (PSR) published a document explaining its cost benefit analysis (CBA) framework. The framework is used to help the PSR develop policies that it can expect to have a positive impact.

The PSR emphasises the importance of having policies that are based on appropriate and informed economic evidence, which will often include CBAs. As such, CBAs assist the PSR in assessing whether regulatory action will have an overall positive impact. The PSR notes that it is important to be transparent about how it uses CBAs and this is why it is publishing its draft CBA framework at this stage.

Under the Financial Services and Markets Act 2023, the Financial Conduct Authority (FCA) is required to establish an independent CBA Panel, and the PSR is required to publish a statement of policy on the CBA after consultation with the FCA CBA Panel. Once this Panel is in place, the PSR will consult with it on its CBA framework and will then publish a draft statement of policy for public consultation.