Posted on: April 8, 2025

Bank of England Statistical Taxonomy 1.3.1

The Bank of England issued Statistical Notice 2025-02 regarding its draft taxonomy 1.3.1. This taxonomy does not introduce additional reporting and will only correct known issues.

For any institution that uses the Bank of England’s utility tool to create XBRL files, it should be aware that this will be withdrawn as part of the taxonomy. Affected firms may wish to contact Whistlebrook to discuss moving to a suitable alternative mechanism.

Further details on this draft taxonomy can be accessed via the following links:

https://www.bankofengland.co.uk/statistics/data-collection/statistical-reporting#:~:text=You%20need%20to%20implement%20the,that%20will%20affect%20your%20reporting (scroll down to Data Model)

Statistical Notice 2025/02 – Updated taxonomy and data point model Version 1.3.1 | Bank of England

Whistlebrook will amend its regulatory reporting product when the taxonomy becomes effective.

Bank of England Banking Taxonomy 3.9.0

On 3rd April 2025, the Bank of England published a first draft of its taxonomy for reporting by those firms that will be subject to the Small Domestic Deposit Takers regime (SDDT). According to the release note, the effective date of this new taxonomy will be 1st January 2027. Based on that information, SDDT and Basel 3.1 will commence on the same date. Whistlebrook will make changes to its regulatory reporting software so that the taxonomies are included. As at the time of this newsletter, there are three draft Banking Taxonomies to be introduced. They are:

3.7.0 – Basel 3.1

3.8.0 – Step-in risk

3.9.0 – SDDT.

Further details can be found via the following link – Banks, building societies and investment firms | Bank of England

FSCS Deposit Protection Limit

The Prudential Regulation Authority issued consultation paper CP 4-25 in which it proposed an increase to the deposit protection limit from £85,000 to £110,000. The amount applicable to Temporary High Balances THB (e.g. from residential property transactions) will be increased from £1million to £1.4million. The six months period specific to THB will remain unchanged. A decision on whether the changes will go ahead is expected in November 2025.

Deposit taking firms will be required to make any relevant system changes or work with their software provider, to amend the protection limit. The effective date of the change is 1st December 2025.

Bank Resolution Tool

HM Treasury issued a consultation paper in January 2024 and proposed a fourth way of dealing with bank failures. The method that was proposed refers to the scenario where a small (i.e. minimum capital requirements for MREL need not be more than the higher of Pillar 1 plus 2A versus Tier One that satisfies the leverage ratio requirement) institution fails. That definition includes building societies and some investment firms.

Under the proposal, a levy will be made on the banking sector and paid to the Financial Services Compensation Scheme. Those funds will then be used to recapitalise a failing bank, where an alternative means of resolution, such is ‘modified insolvency’, is not in the public interest.

The consultation by the Prudential Regulation Authority is about having the Bank Resolution (Recapitalisation) Bill amended. Only once that amendment is made, can the new resolution mechanism be implemented.

Residential Mortgage Loan to Income Threshold

The Prudential Regulation Authority’s consultation paper 6-25 proposes an increase to the threshold at which a firm must restrict residential mortgages that have a Loan to Income (LTI) of 4.5 or more. Currently, if a lender provides new residential mortgages (in total) of £100million or more in a year, then those with LTI of 4.5 or above, must be limited to 15% of the firm’s annual volume of such lending. It is proposed that the £100million threshold be increased to £150million.

UK Leverage Ratio Framework and Retail Deposits Threshold

In the Prudential Regulation Authority’s consultation paper 2-25 (issued 5th March), it is proposed that the retail deposits threshold be increased from £50bn to £70bn. That threshold is one of the determinants as to whether a firm is subject to the Leverage Ratio Framework. The other criteria that would make an entity fall under the framework is the £10billion limit on non-UK assets. The latter is not proposed to be changed.

HM Treasury Policy Paper

A paper was issued on 31st March 2025 and discussed a new approach about supporting growth in the UK economy. As part of that, there is reference to regulators and regulation being supportive of that goal. Of interest, is a statement within Annex A, that says both the PRA and FCA will “reduce regulatory reporting requirements for firms.”. That together with changes from Basel 3.1 and SDDT (which will contribute to that reduction), point to a busy time for financial services regulation.

The paper can be found via this link – New approach to ensure regulators and regulation support growth (HTML) – GOV.UK

WIRES® Releases

The current planned release of Whistlebrook’s regulatory reporting system, WIRES®, is below

Reference Content Estimated Date
7.0 Minor enhancements 30th June 2025

 

This regulatory update is Whistlebrook’s understanding of the position as at 8th April 2025.