UK bank failure regime sees streamlined reporting requirements
The Bank of England and Prudential Regulation Authority have finalised changes to firms' resolution reporting and disclosure requirements. This package reduces the regulatory burden while maintaining a robust regime that supports growth and competition.
Higher thresholds, fewer reviews
The Bank of England and PRA have raised the threshold for firms in scope of Resolution Assessment Framework (RAF) reporting and disclosure requirements from £50 billion to £100 billion in retail deposits.
This adjustment aims to maintain a proportionate resolution assessment framework.
Concurrently, Small Domestic Deposit Takers will now be required to review their recovery plans every two years, moving from an annual cycle.
These specific changes are set to be implemented from 1 April 2026.
The overall goal is to reduce the regulatory burden on smaller and less complex firms, reflecting their reduced risk to UK financial stability, while ensuring the largest firms remain resolvable.
This approach supports competition and sustainable growth within the banking sector.
MREL and Pillar 3 streamlined
Amendments to Minimum Requirement for Own Funds and Eligible Liabilities (MREL) reporting will simplify and clarify existing expectations.
These changes reduce the overall reporting burden on firms while ensuring the Bank and PRA receive essential information for effective resolution planning, with implementation from 1 January 2027.
Additionally, changes to Pillar 3 disclosure will improve how firms explain their resolvability resources and capital distribution limits.
This aims to provide market participants and customers with decision-useful information, also effective from 1 January 2027.
Deputy Governor Dave Ramsden underscored the need for a robust, responsive, and proportionate resolution regime that supports competition and growth.