The Prudential Regulation Authority (PRA) has published its final Policy Statement PS25/25 and SS 4/25 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.
Katalysys recently hosted a roundtable in collaboration with UK Finance and representatives from the PRA, where we discussed the practical challenges firms are facing in preparing for implementation. Based on those discussions and our ongoing work supporting several institutions with Basel 3.1 readiness, we have produced a white paper focusing on the key areas of implementation that carry the greatest risk.
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 Prudential Regulation Authority (PRA) has published its final Policy Statement PS25/25 and SS 4/25 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.
