The Prudential Regulation Authority (PRA) published an updated annual report from the statutory Cost Benefit Analysis (CBA) Panel covering 1 July 2024 to 28 February 2025, describing how the Panel has advised the PRA and the Bank of England on the preparation of CBAs for proposed changes to rules affecting PRA-regulated firms and financial market infrastructure (FMI) entities. The report frames the Panel’s first year as focused on improving the clarity, transparency and methodological rigour of CBAs, with the PRA and the Bank disclosing Panel feedback and their responses in relevant consultation papers. Over the period, the Panel met six times, advised on the PRA’s and the Bank’s new statements of policy on their CBA approaches, and provided input on eleven CBAs across banking, insurance and FMI topics, including CBAs accompanying consultation papers proposing new or amended rules and one CBA linked to a proposed supervisory statement update. The report sets out how the PRA will generally consult the Panel where it considers annualised net direct costs to PRA firms exceed ±GBP 10 million, a threshold applied from 12 December 2024, while no equivalent quantitative threshold has been set for the Bank in its FMI rulemaking given the novelty of its CBA duty. It also records Panel costs of GBP 165,923 incurred up to February 2025, and notes Sergio Afonso’s appointment as the second PRA firm member with effect from 31 January 2025. Looking ahead, the Panel expects to continue reviewing relevant CBAs accompanying PRA and Bank rule consultations during the remainder of 2025, and the PRA and the Bank plan to begin a review of their CBA statements of policy in the second half of 2025 after public feedback periods have ended.
Prudential Regulation Authority 2025-06-26
Prudential Regulation Authority publishes Cost Benefit Analysis Panel report highlighting first-year CBA scrutiny and ±GBP 10 million consultation threshold
The Prudential Regulation Authority (PRA) released an annual report from the Cost Benefit Analysis (CBA) Panel, highlighting its advisory role to the PRA and the Bank of England on CBAs for rule changes affecting PRA-regulated firms and financial market infrastructure entities. The report details the Panel's focus on enhancing clarity, transparency, and methodological rigour in CBAs, with feedback incorporated into consultation papers. The PRA will consult the Panel on CBAs where annualised net direct costs exceed ±GBP 10 million, noting Sergio Afonso's appointment as a PRA firm member.