The Financial Policy Committee’s framework for the O-SII buffer

Following its consultation in January 2016, the Financial Policy Committee (FPC) published its framework for the Systemic Risk Buffer (SRB) on 26 May 2016. On 29 December 2020, as part of the implementation of Capital Requirements Directive (CRD) V, the CRD IV SRB was replaced by the Other Systemically Important Institutions (O-SII) Buffer.

First published on 26 May 2016

As part of the legislative package implementing the recommendations of the Independent Commission on Banking in the UK, the FPC is required to produce a framework for a systemic risk buffer (SRB) for ring-fenced banks and large building societies.

The SRB is one of the elements of the overall capital framework for UK banks and building societies as set out by the FPC in its publication ‘The framework of capital requirements for UK banks’, which was published alongside the December 2015 Financial Stability Report.
The SRB will be applied to individual institutions by the Prudential Regulation Authority (PRA) and will be introduced at the same time ring-fencing comes into force in 2019.

Update 29 December 2020

As set out in the October 2020 FPC Record, the introduction of the Capital Requirements Directive V requires the legal basis for the systemic risk buffer (SRB) to change. As such, the FPC would replace the SRB framework with the O-SII buffer framework. The O-SII Buffer will be set at the same rate as firms’ current SRB buffer.

Update 23 May 2022

The O-SII framework was updated to reflect changes made by the Financial Policy Committee as part of its 2021 review.

Download PDF 

Consultation paper