The Bank of England’s Prudential Regulation Authority has launched a consultation proposing that 128 thresholds across banking, insurance and credit union regulation increase automatically in line with nominal UK gross domestic product. The thresholds determine which rules apply to firms, how they apply and what firms must report. The change would replace periodic manual updates and is intended to prevent thresholds from becoming outdated, particularly for small and medium-sized firms close to regulatory cutoffs. The thresholds range from GBP 7,500 for amounts owed to a credit union by an individual to GBP 320 billion in total assets for detailed capital reporting. They also include thresholds governing the scope of Solvency UK and the Small Domestic Deposit Takers regime. The first indexation would take place on July 1, 2031, with adjustments every five years thereafter. Nominal UK GDP was selected because it captures both price changes and real economic growth. Thresholds considered unsuitable for automatic indexation are excluded. A parallel discussion paper seeks industry views on certain excluded thresholds, including those jointly owned with the Financial Conduct Authority, to assess whether they should also be indexed automatically.
Bank of England’s Prudential Regulation Authority proposes automatic GDP indexation for 128 regulatory thresholds
The Bank of England’s Prudential Regulation Authority proposes automatically increasing 128 banking, insurance and credit union thresholds in line with nominal UK GDP. The first adjustment would occur on July 1, 2031, followed by updates every five years. A parallel discussion paper considers whether additional excluded thresholds should also be indexed.