BoE has published a consultation paper from the Financial Policy Committee (FPC) on the framework for the systemic risk buffer (SRB). The SRB will be applied to ring-fenced banks and large building societies holding more than £25 billion of household and SME deposits. The consultation sets out:

  • the methodology for assessing and scoring systemic importance;
  • a proposed threshold of £175 billion of total assets at which firms are considered to be systemically important – there will be no SRB for firms below this threshold;
  • the calibration of the SRB for firms exceeding the threshold – on current analysis, the FPC expects the largest bank to have an SRB of 2.5% (3% is the maximum permitted SRB); and
  • an overview of FPC’s current approach on the application of the additional leverage ratio buffer to ring-fenced banks.

Consultation closes on 22 April. (Source: BoE Consults on FPC’s Systemic Risk Buffer Framework)