The PRA's approach to the implementation of the systemic risk buffer

Statement of Policy
Published on 13 December 2018

This Statement of Policy (available under ‘Current version’ below) was updated following Policy Statement 32/18 ‘The system risk buffer: Updates to the Statement of Policy’.

For previous updates to the SoP and details of the updates, please see the ‘Past updates’ section below.


This statement of policy (SoP) sets out the Prudential Regulation Authority’s (PRA) approach to the implementation of the systemic risk buffer (SRB).

In line with the Independent Commission on Banking (ICB) recommendations, the UK legislation implementing the SRB requires the Financial Policy Committee (FPC) to establish a framework for an SRB that applies to large building societies and ring-fenced bodies (RFBs). The SRB Regulations require the PRA to apply the framework set out by the FPC on the SRB from 1 January 2019.

The FPC published ‘The Financial Policy Committee’s framework for the systemic risk buffer’ (‘FPC framework’) in May 2016. Alongside the FPC framework, this SoP will form the Bank of England’s broader framework for the SRB.

The PRA will review this SoP at least every two years.

This SoP is relevant to RFBs, within the meaning of section 142A of the Financial Services and Markets Act 2000 (FSMA), and large building societies that hold more than £25 billion in deposits (where one or more of the accountholders is a small business) and shares (excluding deferred shares) – jointly ‘SRB institutions’.

Past updates

Published: 5 December 2016

This SS was updated following CP27/16, ‘The PRA’s implementation of the systemic risk buffer’. In CP27/16, the PRA consulted on a draft SoP setting out its approach to the implementation of the systemic risk buffer. The PRA received one response to the CP, which supported the proposals. The PRA is now publishing the final SoP without material amendments from the draft.

Effective from: 5 December 2016

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