Featured Insights

UK Basel 3.1: Overview of the final rules

On 20 January 2026, the PRA published PS1/26, finalising Basel 3.1 rules and related policy materials. The package largely confirms the near-final policy, with minor clarifications. This article provides an overview of the final rules. This article provides an overview of the final UK Basel 3.1 rules.

SS 5/25: Approaches to managing climate related risks

The Prudential Regulation Authority (PRA) has published its final Policy Statement PS25/25 and SS 5/25 on climate-related financial risks on 3 December 2025.

We have broken down the Supervisory Statement into a set of 41 expectations that non-systemic banks will need to proportionately consider.

How Severe Should a Liquidity Stress Test Be?

Liquidity stress testing remains a cornerstone of effective risk management and regulatory compliance for banks. However, a persistent challenge lies in interpreting what constitutes a “severe but plausible” stress scenario, particularly in the context of evolving depositor behaviours and increasing digitalisation of banking.

This paper aims to address this challenge by examining how stress scenarios can be robustly calibrated using empirical evidence backed by statistical methods, with particular focus on liquidity stress testing informing the Internal Liquidity Adequacy Assessment Process (ILAAP).

Joshua Nowak 13/02/2026 Joshua Nowak 13/02/2026

Stress Testing the Future: A Small- and Medium-sized Banks' Guide to Climate Scenario Analysis

Climate change presents profound challenges for banks, affecting a range of prudential risks through both physical and transition channels. Regulators now expect firms to embed climate-related financial risks (CRFR) as part of their core risk management processes. The Prudential Regulation Authority’s (PRA) Supervisory Statement 5/25 marks a clear step forward: climate scenario analysis (CSA) is no longer simply encouraged. It must inform strategy, risk appetite, capital and liquidity planning, and even reverse stress testing.

Anindya Ghosh chowdhury 09/12/2025 Anindya Ghosh chowdhury 09/12/2025

SS 5/25: Approaches to managing climate related risks

The Prudential Regulation Authority (PRA) has published its final Policy Statement PS25/25 and SS 5/25 on climate-related financial risks on 3 December 2025.

We have broken down the Supervisory Statement into a set of 41 expectations that non-systemic banks will need to proportionately consider.

Joshua Nowak 05/12/2025 Joshua Nowak 05/12/2025

Evolving Climate Risk Expectations for UK Banks (SS5/25 via PS25/25)

On 3 December 2025, the PRA published its final Policy Statement PS25/25 on climate-related financial risks. The final expectations now sit in Supervisory Statement SS5/25 ‘Enhancing banks’ and insurers’ approaches to managing climate-related risks’, which immediately replaces the old SS3/19. The changes enhance requirements in areas such as governance, risk management, scenario analysis, data, and disclosure.