Featured Product

    PRA Finalizes Policy on Simplified Obligations for Recovery Planning

    December 07, 2020

    PRA published the policy statement PS25/20 on simplified obligations for recovery planning, in the form of the updated supervisory statement SS9/17 on recovery planning (Appendix 1). PS25/20 also provides feedback to responses to the consultation paper CP10/20, which proposed to allow certain firms to benefit from simplified obligations for recovery planning. After considering responses to the consultation, PRA has made additional changes to the draft amendments to SS9/17. The final policy will take effect immediately.

    Under Article 4 of the Bank Recovery and Resolution Directive (BRRD), PRA has discretion to apply simplified obligations for recovery planning for firms, where their failure is not expected to have a significant negative effect on financial markets, on other institutions, on funding conditions, or on the wider economy, taking account of the other criteria set out in Article 4(1). Simplified obligations enable PRA and BoE, to decide on the level of detail required in recovery and resolution planning of firms. The proposals in CP10/20 related to how PRA would perform the eligibility assessment process to determine which firms are eligible for simplified obligations in respect of recovery planning. PRA received two responses to CP10/20. The responses were supportive of the proposal to introduce simplified obligations. 

    PRA has considered the responses and has made additional changes to SS9/17. The additional changes include addition of details to explain how the recovery planning expectations of PRA vary according to the size of firms as well as to explain that eligible firms are permitted to include a minimum of only two scenarios in their recovery plans. PRA expects firms to include a combined capital and liquidity stress, as these scenarios are the most challenging. PRA considers that the changes to the SS9/17 are not significant and will not materially alter the cost-benefit analysis presented in CP10/20. 

    PS25/20 is relevant to authorized UK banks, building societies, designated UK investment firms, and their qualifying parent undertakings, to which the Recovery Plans Part of the PRA Rulebook applies. The policy is likely to be of interest to smaller and non-systemic firms that do not perform critical functions. The policy set out in PS25/20 has been designed in the context of the withdrawal of UK from EU and entry into the transition period, during which time UK remains subject to European law. PRA will keep the policy under review to assess whether any changes would be required due to changes in the UK regulatory framework at the end of the transition period, including those arising once any new arrangements with the European Union take effect. PRA has assessed that the policy would not need to be amended under the EU (Withdrawal) Act 2018.

     

    Related Links

    Effective Date: December 07, 2020

    Keywords: Europe, UK, Banking, Recovery Planning, Basel, BRRD, CP 10/20, PS25/20, SS9/17, Resolution Framework, PRA

    Featured Experts
    Related Articles
    News

    BIS Paper Studies Impact of Fintech Lending on Small Businesses in US

    The Bank for International Settlements (BIS) published a paper that studies impact of fintech lending on credit access for small businesses in U.S.

    September 26, 2022 WebPage Regulatory News
    News

    UK Regulators Issue CRR Changes and Stress Test Scenarios for Banks

    The Prudential Regulation Authority (PRA) issued the policy statement PS8/22 to amend the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook and update the supervisory statement SS7/13 titled "Definition of capital (CRR firms).

    September 26, 2022 WebPage Regulatory News
    News

    EBA Launches EU-Wide Transparency Exercise in 2022

    The European Banking Authority (EBA) launched the EU-wide transparency exercise for 2022, with results of the exercise expected to be published at the beginning of December, along with the annual Risk Assessment Report.

    September 23, 2022 WebPage Regulatory News
    News

    SRB on CRR Quick-Fix to Policy for Multiple Point of Entry Banks

    The Single Resolution Board (SRB) welcomed the adoption of the review of the Capital Requirements Regulation, or CRR, also known as the "CRR quick-fix."

    September 22, 2022 WebPage Regulatory News
    News

    EC Rule Lists Advanced Economies for Market Risk Capital Calculations

    The European Commission (EC) recently adopted the Delegated Regulation 2022/1622, which sets out the regulatory technical standards to specify the countries that constitute advanced economies for the purpose of specifying risk-weights for the sensitivities to equity.

    September 21, 2022 WebPage Regulatory News
    News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News
    News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News
    News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    News

    MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures

    The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.

    September 15, 2022 WebPage Regulatory News
    News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8521