Bank of England Proposes Faster Bank-Run Liquidity Tests

Digital banking, faster payments and online communications have compressed the timetable for bank runs, challenging liquidity rules built around a 30-day stress horizon after the 2008 financial crisis. The failures of Silicon Valley Bank and Credit Suisse in March 2023 showed that confidence can evaporate and deposits can flee within days, leaving lenders vulnerable if ostensibly liquid assets cannot be sold or pledged quickly enough to meet withdrawals.

The Bank of England’s Prudential Regulation Authority published consultation paper CP5/26 on March 17, 2026, proposing that banks test sudden, severe outflows over a one-week horizon alongside existing monthly reporting. It would remove the exemption shielding sovereign bonds and other Level 1 assets from annual monetisation testing, streamline some data requests and encourage readiness to use central bank facilities. The plan would not require banks to hold more liquid assets; the consultation closes on June 17, 2026.