Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the implications of the Bank of England’s updated remuneration rules on financial regulation and market stability.

The Prudential Regulation Authority (PRA), which is part of the Bank of England, is responsible for setting banks’ and building societies’ remuneration rules, alongside the Financial Conduct Authority (FCA).

The PRA’s new requirements introduce greater flexibility around senior banker pay and strengthen the link between bonus awards and responsible risk-taking. In response to industry feedback, the final rules go further than the original proposals announced last year and apply retroactively to any awards not yet fully paid. The new requirements came into force on 16 October 2025.

The PRA assessed the impact of its updated remuneration rules against its statutory objectives, set by Parliament: a primary objective of promoting the safety and soundness of firms to avoid adverse effects on financial stability and secondary objectives of ensuring effective competition, and enhancing the growth and global competitiveness of the UK economy.

The PRA concluded that the new framework aligns with these objectives. The government supports the PRA’s assessment and decision which reflects our commitment to reinforcing the UK’s position as a competitive global financial sector, while maintaining the resilience and integrity of the financial system.