Overview
On 1 March 2024, the Bank of England Levy replaced the Cash Ratio Deposit scheme as a means of funding the costs of the Bank’s monetary policy and financial stability operations.
Bank of England Levy Framework Document
The Bank of England Levy Framework Document outlines the Bank’s approach to levying the costs of its policy functions in pursuit of its Financial Stability and Monetary Policy objectives.
The Levy will be applied on a proportional basis, which means that the Bank will allocate the policy costs to be recovered by the Levy in proportion to an eligible institution’s liability base. This will be a continuation of how the Cash Ratio Deposit scheme operated. The policy rationale for using the eligible liability base is the link between the size of a financial institution’s liabilities and its potential impact on the Bank’s financial stability and monetary policy functions.
The Bank issued a Policy Statement on the 25 January 2024 confirming the responses received to its Consultation Paper on the Bank of England Levy Framework Document.
Our Statistical Reporting page provides information and guidance for firms on reporting their eligible liabilities.
Any queries on the Bank of England Levy should be sent to BoELevy@bankofengland.co.uk.
Terms and conditions Cash Ratio Deposit (CRD) scheme
The CRD scheme funded the Bank of England’s monetary policy and financial stability functions between 1998 and 2024.
Under the scheme, banks and building societies with eligible liabilities greater than £600 million were required to place a proportion of their deposit base with the Bank on a non-interest bearing basis. The Bank then invested these funds in interest bearing assets (mainly gilts) and the income generated was used to fund the Bank’s monetary policy and financial stability functions. Details on the proposals and consultation process for moving to the Bank of England Levy can be found in paragraph 1.2 in the Bank of England Levy Framework Document.