FIN.

BoE and PRA consult on updates to international banking supervision

The BoE and PRA have launched a consultation on proposed updates to international banking branch and subsidiary supervision to reflect changes since introducing the PRA’s SS5/21.

The proposed changes include:

  • Introducing additional indicative criteria for consideration by the PRA when determining the appropriateness of an internal bank operating in the UK as a branch rather than subsidiary.
    • The PRA is proposing to update its expectations in SS5/21 to include an additional indicative threshold of £300 million of total retail and small company demand deposits (ie including non FSCS-covered deposits).
  • Clarifying expectations around booking arrangements and extending their application to a subset of UK banks.
    • In proposed changes to booking arrangements, firms will need to consider various factors including potential fragmentation; split desk impacts; and economic rationale.
  • Amending the PRA branch return, aiming to improve whole-firm liquidity data collection.
    • Changes to reporting requirements for third-country branches.
  • Making non-substantive amendments to SS5/21 to clarify existing expectations and processes of the PRA.

The proposed changes to branch reporting is scheduled to be implemented on 31 December 2025. and changes to SS5/21 are proposed to come into force during 2025 Q2.

The consultation closes on 30 October 2024.

Harry Wells