Regulatory Alerts2026-03-17
PRA publishes liquidity reform proposals
The Prudential Regulation Authority has published proposals to modernize UK bank liquidity standards, requiring firms to evaluate asset monetization barriers and conduct weekly internal stress tests for rapid outflows. The reforms remove the annual testing exemption for sovereign bonds and other level 1 assets while reducing overall data requests to prevent reporting overload. By focusing on operational readiness and central bank facility access rather than increasing asset holdings, the measures ensure banks can quickly raise cash during fast-paced stress events like the 2023 Silicon Valley Bank collapse.
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