United Kingdom's Prudential Regulation Authority published the Cost Benefit Analysis Panel’s 2024 annual report, setting out how the newly established statutory panel has begun reviewing the cost-benefit analyses (CBAs) underpinning Prudential Regulation Authority and Bank of England rule consultations. Covering 1 July to 31 October 2024, the report positions the Panel as an independent adviser on the preparation and use of CBAs rather than an assurance or audit function. Early work was dominated by the transfer of regulatory material from legislation into the Prudential Regulation Authority Rulebook, with a compressed meeting schedule and a substantial pipeline expected to continue through 2025. For Prudential Regulation Authority rules, CBAs are now normally reviewed only when the annualised net direct cost impact on Prudential Regulation Authority-regulated firms is plus or minus GBP 10 million, while the threshold does not apply when the Bank uses its rulemaking powers as a financial market infrastructure regulator. The report summarises feedback on CBAs for consultations on the remainder of the Capital Requirements Regulation restatement and securitisation changes, remuneration reform, reforms to the UK insurance special purpose vehicle regime, new fundamental rules for central counterparties and centralised securities depositories, Large Exposures Framework reforms implementing remaining Basel standards, and forthcoming depositor protection changes. Cross-cutting issues included clearer articulation of policy drivers and financial stability benefits, handling of uncertainty and dependencies in quantified benefits, and fuller explanation of familiarisation, compliance and operational cost assumptions. Around eight Panel meetings are planned for 2025, alongside a workshop on CBA best practice aimed at strengthening the Prudential Regulation Authority and Bank of England toolkits. A further meeting in November 2024 and details of costs incurred by the Prudential Regulation Authority will be covered in the next report, which will cover the year to 28 February 2025; recruitment of the second Panel member from a Prudential Regulation Authority-authorised firm is expected to conclude with an appointment in early 2025.
Prudential Regulation Authority 2025-01-10
United Kingdom's Prudential Regulation Authority publishes Cost Benefit Analysis Panel annual report and confirms plus or minus GBP 10 million materiality threshold for PRA CBA reviews
The UK's Prudential Regulation Authority released the Cost Benefit Analysis Panel’s 2024 report, highlighting its role in reviewing cost-benefit analyses for rule consultations by the Authority and the Bank of England. The report covers the Panel's advisory function, focusing on regulatory material transfers and feedback on reforms, including the Capital Requirements Regulation and Large Exposures Framework. The Panel plans eight meetings in 2025 and a workshop to enhance CBA practices.