Katalysys had convened a consortium of non-systemic banks to jointly develop a credible, practical, and proportionate framework for climate-related financial risk assessment.

The work program is designed to fully address the immediate requirements of SS 5/25 - namely a comprehensive gap analysis, board education, and a credible & ambitious remediation plan.

On 19 February 2026, the PRA published CP3/26, setting out proposed amendments to the PRA Rulebook to reflect the implementation of HM Treasury's Overseas Prudential Requirements Regime (OPRR).

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.

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.

This article outlines the key changes to the calculation of Credit valuation adjustment and counterparty credit risk, as part of the Basel 3.1 final rules (PS1/26).

This article highlights the key changes to real estate exposures under the standardised approach to credit risk, as set out in the final Basel 3.1 rules (PS1/26).

This article highlights the key changes to the calculation of own funds requirement for operational risk, as set out in the final Basel 3.1 rules (PS1/26).

This article highlights the key changes to exposures to corporates under the standardised approach to credit risk, as set out in the final Basel 3.1 rules (PS1/26).

This article highlights the key changes to the retail exposure class under the standardised approach to credit risk, as set out in the final Basel 3.1 rules (PS1/26).

This article outlines the changes relating to exposures to institutions under the standardised approach of credit risk, as part of the Basel 3.1 final rules (PS1/26).

This article outlines the key changes to the calculation of market risk capital requirements as part of the Basel 3.1 final rules (PS1/26).

This article highlights the key changes to exposures and default under the standardised approach to credit risk, as set out in the final Basel 3.1 rules (PS1/26).

This article outlines the reporting changes, as set out in the final Basel 3.1 rules (PS1/26).

On 20 January 2026, the PRA published PS4/26, finalising SDDT 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 highlights the key changes to the treatment of off-balance sheet items under the standardised approach to credit risk, as set out in the final Basel 3.1 rules (PS1/26).

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.

The PRA’s PS27/25, part of its wider FBD programme, finalises CP21/25 proposals by confirming the deletion of 37 banking reporting templates and the consolidation of FINREP rules to simplify prudential reporting, reduce costs, and modernise the UK regulatory data framework.

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.

Firms are required to hold regulatory capital to absorb losses. However, banks in the UK often feel that they are holding heightened levels of regulatory capital, which is stifling their potential for evolution and expansion. 

The latest Policy Statement from the regulator near-finalises the retirement of the refined methodology for Pillar 2A capital, and embeds some non-substantive changes on pension obligation risk and interest rate risk in the banking book.