The Prudential Regulation Authority (PRA) has opened a
consultation on raising the retail deposits leverage ratio threshold from £50 billion to £70 billion. The leverage ratio applies to major UK banks, building societies and investment firms and to those firms with significant non-UK assets. The PRA sets thresholds to determine which firms are subject to the leverage ratio. The thresholds are £50 billion in retail deposits for major UK firms and £10 billion for non-UK assets for firms with significant non-UK assets. The PRA is proposing to increase the threshold for major UK firms, which was first implemented in 2016, to £70 billion to maintain the proportionality of the framework, ensure it reflects the risk appetite and does not lead to inadvertent regulatory tightening. The threshold for significant non-UK assets will remain the same as the PRA considers that it is still appropriate. Responses to the consultation may be submitted until 5 June. The PRA proposes that the implementation date for these changes would be 1 January 2026.
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