FPC publishes Financial Stability in Focus on bank capital framework
The Bank of England's Financial Policy Committee published a Financial Stability in Focus edition on the bank capital framework.
The FPC has issued a dedicated focus paper on the UK bank capital framework, signalling its views on calibration, buffers, and structural design. This may inform forthcoming PRA rule development and stress test recalibration. Banks should assess implications for CET1 targets, MREL, and buffer usability guidance.
Provides forward-looking indication of FPC thinking on capital adequacy and buffer design that will shape PRA policy.
Action Required
Capital management and treasury teams should review the FPC's stated positions on the capital framework and align internal capital planning assumptions accordingly.
FPC pronouncements on the capital framework are strategically material for UK bank capital planning and ICAAP.
Reassess ICAAP assumptions and buffer usability narratives against FPC's stated views in the Focus paper; escalate any material divergence to CRO and ALCO.
“The Financial Stability in Focus sets out the FPC's view on specific topics related to financial stability.”
Published: 2026-07-07