PRA Proposes Automatic GDP-Linked Increases for 128 Regulatory Thresholds
The Prudential Regulation Authority (PRA) has put forth a proposal to adjust 128 regulatory thresholds for banks, insurers, and credit unions in line with nominal Gross Domestic Product (GDP). This initiative seeks to improve proportionality, reduce compliance expenses, and offer firms more certainty. The most significant threshold is £320 billion in total assets for in-depth capital reporting, while the least is £7,500 concerning credit union debts. Adjustments will take place every five years, commencing on 1 July 2031. The PRA selected nominal UK GDP as the indexation basis due to its comprehensive representation of economic shifts. The consultation period is set from 7 October 2026 to 7 February 2027, with some thresholds addressed separately. This proposal is a continuation of recent PRA reforms.
Key facts
- The PRA proposes automatic indexation of 128 thresholds across banking, insurance and credit unions.
- Thresholds would rise with nominal UK GDP, published by the Office for National Statistics.
- The largest in-scope threshold is £320 billion in total assets for detailed capital reporting.
- The smallest is a £7,500 threshold for amounts owed to a credit union by an individual.
- The first update is scheduled for 1 July 2031, with further updates every five years.
- The consultation opens on 7 October 2026 and closes on 7 February 2027.
- Katharine Braddick is Deputy Governor for Prudential Regulation at the Bank of England and CEO of the PRA.
- Some thresholds, including those jointly owned with the Financial Conduct Authority, are covered in a parallel discussion paper under Section 4 of CP13/26.
Entities
Artists
- Katharine Braddick
Institutions
- Prudential Regulation Authority
- Bank of England
- Office for National Statistics
- Financial Conduct Authority
Locations
- United Kingdom