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.
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.
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).
The PRA’s latest consultation (CP5/26) marks a notable evolution in the UK liquidity framework.
Rather than increasing quantitative requirements, focus is shifting toward liquidity usability and operational readiness, reflecting lessons from recent market events and the accelerating impact of digital banking on deposit behaviour.
