UK PRA finalises policy on increasing retail deposits threshold for leverage ratio requirement

The UK Prudential Regulation Authority (PRA) has published policy statement PS22/25, confirming changes to the retail deposits threshold for the UK leverage ratio requirement. Following feedback on its March consultation, the PRA has amended the final policy to increase the retail deposits threshold for major UK firms from GBP50 billion to GBP75bn, compared to the GBP70bn initially proposed. It will also calculate the metric of firms' retail deposits assessed against this threshold using a three-year averaging mechanism. The non-UK assets threshold remains unchanged at GBP10bn. Modifications by consent granted during the review, which allowed firms to disapply the leverage ratio part of the PRA Rulebook while thresholds were under consideration, will cease on June 30, 2026. The final policy will take effect on January 1, 2026. The PRA will continue annual reviews of both thresholds as part of the Financial Policy Committee's oversight of the leverage ratio framework. The final policy and rules are set out in the appendices to the policy statement.

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