CP5/26 – Modernising the liquidity policy framework

2026

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This consultation paper proposes modernising the UK's liquidity policy framework to enhance financial stability and firm resilience in light of evolving market dynamics.

* Details proposed changes to the PRA's liquidity framework, including assessing liquidity resources, monetisation risk, and the role of central bank facilities.
* Outlines proposals to remove exemptions for Level 1 Assets from monetisation testing and to clarify the management of collateral.
* Includes an analysis of the PRA's objectives, a cost-benefit analysis, and other legal requirements related to the proposed changes.

Tags: liquidity, policy, framework, banking, regulation

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