A&O Shearman | FinReg | UK FPC finalises O-SII buffer framework review
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  • UK FPC finalises O-SII buffer framework review

    29 July 2025
    The Bank of England (BoE) has published the Financial Policy Committee's (FPC) final response to the 2024 review of the Other Systemically Important Institutions (O-SII) buffer framework. This follows the March consultation, which proposed increasing the O-SII buffer thresholds to reflect the 20% cumulative growth in nominal GDP between 2019 and 2023 and extending the O-SII buffer review cycle from two to three years. In response to consultation feedback, the FPC has made only one adjustment to the indexation period—starting with the O-SII buffer rates set in 2025, a longer indexation period, from 2019 to 2024, will be used to determine future rates. This means the O-SII buffer thresholds will increase by 27%, rather than the 20% proposed in the consultation. To ensure firms benefit without delay, the revised framework takes immediate effect. Looking ahead, the December review of O-SII buffer rates (applicable from 1 January 2027) will use thresholds indexed to nominal GDP data up to end-2024.

    The framework has been largely implemented as consulted on, with the UK Prudential Regulation Authority (PRA) reissuing firms' 2024 O-SII buffer rates, using end-2023 balance sheet data and thresholds indexed by 20%, which apply from 1 January 2026.

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