LBMA Response to PRA Consultation Paper CP5/26: Modernising the Liquidity Policy Framework

LBMA responds to the Prudential Regulation Authority’s Consultation Paper CP5/26 on modernising the liquidity policy framework.

LBMA supports the PRA’s focus on liquidity usability, including monetisation speed, operational readiness and access to Bank of England (BoE) liquidity. Gold is a deeply liquid asset with continuous global trading and resilient market infrastructure. It has consistently served as a source of liquidity during market stress. Gold held at the BoE is operationally ready and transferable, yet not recognised as eligible collateral, creating a gap between practical usability and regulatory recognition.

In the context of CP5/26, LBMA invites the PRA to consider whether allocated gold held at the BoE should receive more explicit recognition within firms’ liquidity assessments and, over time, be considered for BoE collateral eligibility, supported by evidence of its practical liquidity performance.

You can read the full response below.