PS10/26 – Amendments to Resolution Assessment threshold and Recovery Plans review frequency

Policy statement 10/26
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• CP14/25 – Amendments to Resolution Assessment threshold and Recovery Plans review frequency

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Published on

26 March 2026

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1: Overview

1.1 This Prudential Regulation Authority (PRA) policy statement (PS) provides feedback to responses the PRA received to consultation paper (CP) 14/25 – Amendments to Resolution Assessment threshold and Recovery Plans review frequency.

1.2 In CP14/25, the PRA proposed two changes to the Bank of England’s (the Bank) resolution and recovery frameworks. These frameworks were originally introduced as a response to the 2007-2008 financial crisis to make firms better able to respond to a financial stress and to help ensure their resolution in an orderly manner with minimum disruption if they cannot recover. The proposals in CP14/25 were informed by the PRA’s and the Bank’s experience of operating these frameworks, and seek to ensure the frameworks remain calibrated appropriately for the risks they address and that the burden on firms is proportionate. [1] Respondents to the CP were supportive of both proposals. Two highlighted the increase in proportionality the proposals would bring to the resolution and recovery regimes.

1.3 In CP14/25, the PRA proposed to:

• raise the threshold at which firms come into scope of the Resolution Assessment Part of the PRA Rulebook (the Rulebook) on reporting and disclosure from £50 billion to £100 billion in retail deposits, ensuring only the very largest firms are subject to these requirements, commensurate with the risks their failure would pose; and
• reduce the required frequency for Small Domestic Deposit Takers (SDDTs) to review their recovery plans from at least annually to at least every two years, reducing burden on these firms and supporting better quality planning. [2] 1.4 Both proposals advance the PRA’s primary objective of firms’ safety and soundness and the PRA's secondary objectives of competition and competitiveness and growth by maintaining robust requirements in relation to recovery and resolution, while applying these frameworks in a proportionate way.

1.5 This PS sets out the PRA’s final policy after considering responses received, as follows:

• amendments to the Resolution Assessment Part of the Rulebook (Appendix 2);
• amendments to the Recovery Plans Part of the Rulebook (Appendix 3); and
• amendments to supervisory statement (SS) 9/17 – Recovery planning (Appendix 4). 1.6 This PS is relevant to PRA-authorised UK banks and building societies. The recovery planning proposal is relevant to SDDTs and SDDT consolidation entities. This PS is not relevant to credit unions.

1.7 Alongside this PS, the PRA has today published its final policy for two further changes to ensure the resolution framework is proportionate and supports growth while remaining robust. These changes relate to the minimum requirement for own funds and eligible liabilities (MREL): PS9/26 – Resolution planning: Amendments to MREL reporting templates and PS11/26 – Disclosure: resolvability resources, capital distribution constraints and the basis for firm Pillar 3 disclosure.

Summary of responses

1.8 The PRA received three responses to CP14/25. All three respondents consented to their names being published; the names are set out in Appendix 1. The respondents welcomed the proposals and made suggestions and observations for the PRA’s consideration. Two suggested the PRA amend the proposal on the Resolution Assessment threshold by setting out a regular schedule by which the PRA would review and update the threshold, for example, every three years. One respondent recommended the PRA index the Resolution Assessment threshold to nominal GDP. One suggested the PRA further reduce the proposed frequency for SDDTs’ recovery plan reviews. Additionally, the respondents shared several comments and suggestions that did not relate directly to the draft policy under consultation. The responses and the PRA’s feedback to them are set out in Chapter 2.

Changes to draft policy

1.9 The policy within this PS remains unchanged from the consultation. Minor changes were made post consultation to the Recovery Plans instrument of the PRA’s own volition, none of which affect the substance of those rules as consulted upon. [3]

1.10 This PS takes account of how the policy advances the PRA objectives and of significant matters that the PRA had regard to. These are as set out in CP14/25. The PRA has set out its response to feedback on its objectives and have regards analysis in Chapter 2.

1.11 When making rules, the PRA is required to comply with several legal obligations. In CP14/25, the PRA published its explanation of why the rules proposed in the CP were compatible with its objectives and with its duty to have regard to the regulatory principles. [4] The analysis presented in CP14/25 remains unchanged.

Implementation

1.12 The policy in this PS will take effect on 1 April 2026.

• Regarding the increase to the Resolution Assessment threshold: From the implementation date, UK firms with equal to or greater than £100 billion in retail deposits will be in scope of the Resolution Assessment rules. The PRA has already communicated the dates by which firms in scope of the amended threshold are next expected to submit reports and publish disclosures. [5]
• Regarding the change in Recovery Plans review frequency for SDDTs: From the implementation date, SDDTs will only be required to review their recovery plans at least once every two years. However, SDDTs experiencing changes which could have a material effect on their recovery plans should update their plans more frequently than the 2-year minimum. The PRA expects that SDDTs which are ‘new and growing banks’ will likely need to review and update their recovery plans more regularly than the proposed minimum. [6] 1.13 References related to the UK’s membership of the EU in the rules and SS covered by the policy in this PS have been updated as part of this PS to reflect the UK’s withdrawal from the EU. These include revisions to the legal definitions of ‘deposit’ and ‘retail deposit’ in the Resolution Assessment Part, as proposed in CP14/25. Unless otherwise stated, any remaining references to EU or assimilated legislation refer to the version of that legislation which forms part of assimilated law. [7]

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2: Feedback to responses

2.1 Before making any proposed rules, the PRA is required by the Financial Services and Markets Act 2000 (FSMA) to have regard to any representations made to it in response to the consultation, and to publish an account, in general terms, of those representations and its feedback to them. [8]

2.2 The PRA has considered the representations received in response to CP14/25. This chapter sets out the PRA’s feedback to those responses and its final decisions.

2.3 The responses have been grouped as follows:

• increasing the Resolution Assessment threshold;
• reducing Recovery Plans review frequency for SDDTs; and
• general comments and responses outside the scope of the proposals in the CP.

Increasing the Resolution Assessment threshold

2.4 The PRA proposed to increase the Resolution Assessment threshold from £50 billion to £100 billion in retail deposits and to review this threshold periodically, for example after each reporting and disclosure cycle or in the event of significant changes to other thresholds. One respondent recommended indexing the Resolution Assessment threshold and all other regulatory thresholds every three years using data produced by the Office for National Statistics (ONS) or the Office for Budget Responsibility (OBR). Two respondents suggested that the PRA should review the threshold on a regular basis, for example, every three years, and one also suggested the PRA align its review of the Resolution Assessment threshold with the Bank’s reviews of the MREL thresholds to streamline processes and avoid unnecessary complexity. [9]

2.5 The PRA acknowledges the benefits of regular and systematic indexation of some regulatory thresholds and recognises the importance of predictability and transparency for firms’ planning. The December 2025 Financial Stability Report confirmed that the Bank is working to develop a systematic approach to updating regulatory thresholds that define which different parts of the regulatory framework apply to firms to ensure they reflect economic growth – such as through automatic indexation. [10] Given this ongoing work, the PRA has not made changes to its approach to future reviews of the Resolution Assessment threshold as set out in CP14/25, but the PRA will consider respondents’ comments as it develops its systematic approach to updating regulatory thresholds.

2.6 The PRA notes that, when a firm comes into scope of the Resolution Assessment threshold, it will consider the firm’s circumstances and communicate when its first report and public disclosure are expected. [11] This means that, for example, where a firm has only just come into scope at a time when a threshold review is underway, the PRA will take this into account in determining when to set the firm’s first expected reporting date. This approach helps ensure that transition into scope remains orderly regardless of the timing of threshold updates.

Reducing Recovery Plans review frequency for SDDTs

2.7 The PRA proposed to reduce the required frequency for SDDTs to review their recovery plans from at least annually to at least every two years. SDDTs would continue to be required to update their recovery plans promptly in the event of a change which could have a material effect on their recovery plans, and the PRA could request a firm to produce an updated recovery plan if deemed necessary. This proposal would apply to any SDDT for its recovery plan, and to any SDDT consolidation entity for its group recovery plan.

2.8 One respondent suggested a further reduction to at least once every three years. The respondent noted this would align the review cycles for an SDDT’s recovery plan and its solvent exit analysis (SEA), the latter of which is permitted to be a separate section of the recovery plan. [12]

2.9 Having considered this response, the PRA decided to maintain its proposal as set out in CP14/25. The PRA sees greater benefits in firms’ recovery plans, Internal Capital Adequacy Assessment Processes (ICAAPs), and Internal Liquidity Adequacy Assessment Processes (ILAAPs) being consistent with each other. [13] The PRA requires SDDTs (except for new and growing banks) to update their ICAAPs and ILAAPs at least once every two years rather than annually. [14] Misalignment between a firm’s recovery plan, ICAAP, and ILAAP cycles could result in inaccurate regulatory submissions.

General comments and responses outside the scope of the proposals in the CP

2.10 Respondents made several comments and requests not directly related to the proposals in CP14/25. Two respondents highlighted the importance of individual firms’ business models and strategies when determining thresholds or resolution risk assessments. One respondent also emphasised the importance of clear communication between the Bank and firms to outline proportionate expectations regarding regulatory requirements. These themes were also raised by one respondent in response to CP15/25 – Resolution planning: Amendments to MREL reporting and CP16/25 – Disclosure: resolvability resources, capital distribution constraints and the basis for firm Pillar 3 disclosure. One respondent also requested the PRA clarify a definition of a ‘large and systemic firm’ with respect to the resolution framework and resolvability. The respondent also requested the PRA and wider Bank align their approaches to determining a firm’s systemic significance. One recommended the PRA conduct a review of the volume and necessity of regulatory thresholds and specifically requested clarification on the discrepancy between the PRA’s definition of an SDDT and the Bank’s MREL total assets thresholds.

2.11 The PRA considers that proportionality is inherent in the Resolvability Assessment Framework (RAF) as an outcomes-based framework. Each firm is expected to develop and maintain capabilities, resources and arrangements to achieve the three resolvability outcomes in a way that is appropriate to its size and business model and taking account of its preferred resolution strategy. A larger or more complex firm will therefore need to develop more extensive capabilities in order to achieve the three outcomes. All firms must be prepared to be safely resolved without severe disruption to critical functions or financial stability. [15]

2.12 Additionally, the Bank and PRA are proportionate in their approach to assessments under the RAF and continue to evolve their approach, for example, by carrying out assessments less frequently but with an increased focus on realistic testing of firms’ operational readiness. [16] The Bank and the PRA will continue to engage with firms on their expectations ahead of future RAF assessments. [17]

2.13 The PRA and Bank keep thresholds under review to ensure they continue to meet individual policy objectives. The PRA has committed to reviewing the SDDT criteria, including relevant thresholds, no later than the end of 2028. [18] The PRA considers some staggering of thresholds can be beneficial by preventing a firm coming into scope of multiple requirements at the same time when it crosses a threshold (the ‘cliff-edge’ effect) which could disincentivise the growth of mid-tier firms. [19] In December 2025, the Bank confirmed its work on developing a systematic approach to update regulatory thresholds. [20]

2.14 Respondents also requested the PRA clarify certain regulatory definitions and thresholds. One requested the PRA clarify the definitions of ’new and growing’, and ‘established’ firms. The PRA notes that these terms are defined in SS3/21 – Non-systemic UK banks: The Prudential Regulation Authority’s approach to new and growing banks. One respondent suggested the Bank and PRA review the definition of ‘transactional account’ and the calibration of the MREL transactional accounts threshold. The Bank has previously confirmed its intention to review the definition of ‘transactional account’ and will provide an update in due course. [21]

1. The role of the PRA’s objective to promote the safety and soundness of firms – including by avoiding a repeat of the 2007-2008 crisis – as an important contributor to economic growth is discussed in, competing for growth − speech by Sam Woods.
2. In this PS, references to SDDT(s) should be treated as applicable to both SDDTs and SDDT consolidation entities, unless stated otherwise. The full definition of an SDDT and an SDDT consolidation entity, including the SDDT and SDDT consolidation entity criteria, are set out in the SDDT Regime – General Application Part of the Rulebook.
3. The instrument was amended: (i) to include reference to it being an amendment instrument (as described in the consultation document), (ii) to update the 'Powers exercised' provision at paragraph A of the instrument; and (iii) by the addition of the word ‘once’ before ‘at least every two years’ in rule 4.3(1): this latter amendment for the purposes of consistency with the equivalent wording in rule 4.2(1).
4. Section 138J(2)(d) FSMA.
5. The PRA communicates the expected reporting and disclosure dates on its website, as set out in paragraph 7.5 of SS4/19 – Resolution assessment and public disclosure by firms.
6. The terms ‘new’ and ‘growing’ are defined in SS3/21 – Non-systemic UK banks: The Prudential Regulation Authority’s approach to new and growing banks.
7. For further information please see Transitioning to post-exit rules and standards.
8. Sections 138J(3) and 138J(4) of FSMA.
9. In July 2025, the Bank noted its intention to update the MREL indicative total assets thresholds every three years as necessary to take account of changes in nominal economic growth. See paragraph 4.14 of Statement of policy: The Bank of England’s approach to setting a minimum requirement for own funds and eligible liabilities (MREL).
10. See Financial Stability Report – December 2025.
11. As set out in SS4/19 – Resolution assessment and public disclosure by firms.
12. The Solvent Exit Analysis policy for SDDTs is detailed in PS5/24 – Solvent exit planning for non-systemic banks and building societies.
13. As set out in SS9/17 – Recovery planning.
14. This policy is set out in PS4/26 – The Strong and Simple Framework: The simplified capital regime for Small Domestic Deposit Takers (SDDTs) – final.
15. The PRA works with the Bank and other authorities to set the resolution regime. For more on the approach of the Bank and PRA, see Maintaining a fit for purpose resolution regime.
16. Developments in the Bank’s approach to assessing firms’ capabilities under the RAF are discussed in The evolution of the Bank’s approach to resolution − speech by Dave Ramsden.
17. The Bank published a ‘Dear CFO’ letter in February 2026 with information on its 2026-27 assessment of the major UK firms to support firms’ planning: Letter from Ruth Smith on firms’ preparations for the third Resolvability Assessment Framework (RAF) assessment.
18. See ‘Approach to reviewing the SDDT criteria’ in SoP2/23 − Operating the Small Domestic Deposit Taker (SDDT) regime.
19. For the purposes of CP14/25 and this PS, ‘mid-tier firm’ refers to a firm with a bail-in or transfer preferred resolution strategy, but which does not have retail deposits large enough to be subject to the Resolution Assessment Part of the PRA Rulebook.
20. See ‘Increasing the Resolution Assessment threshold’ section of this PS.
21. See Amendments to the Bank of England’s approach to setting a minimum requirement for own funds and eligible liabilities (MREL).

Appendices

Appendix 1: Respondents to CP14/25 who have consented to the publication of their names

Appendix 2: PRA Rulebook: CRR Firms: Resolution Assessment (Amendment) Instrument 2026

Appendix 3: PRA Rulebook: CRR Firms: Non-Authorised Persons: Recovery Plans (Amendment) Instrument 2026

• Appendix 4: Supervisory statement 9/17 – Recover planning

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