BoE has decided that it will not restart the 2019 liquidity Biennial Exploratory Scenario (BES) exercise. In March 2020, BoE paused the 2019 liquidity BES to alleviate burdens on core treasury staff at the participating banks. BoE uses the BES to explore the potential impact of risks that are not covered by the annual solvency stress tests of large UK banks. The 2019 test focused on how banks would respond to a severe liquidity stress. Insights from the liquidity BES have already helped to shape aspects of the BoE’s response to the impact of COVID-19 pandemic. In addition, HM Treasury announced that UK has joined the International Platform on Sustainable Finance (IPSF).
The UK Chancellor Rishi Sunak underscored the commitment of UK to strengthening international cooperation on environmentally sustainable finance by becoming a signatory to the Joint Statement on the IPSF. UK will contribute to the goals of IPSF to scale up the mobilization of private capital toward environmentally sustainable finance at the global level and promote integrated markets for environmentally sustainable finance, in an effort to deliver on the domestic and international commitments to tackle climate change. IPSF is a multilateral forum of dialog between policymakers that focuses on initiatives in the areas of taxonomies, disclosures, standards, and labels, which are fundamental for investors worldwide to identify and seize investment opportunities that truly contribute to climate and environmental objectives. IPSF aims to exchange and spread information to promote best practices in environmentally sustainable finance; identify barriers and opportunities to help scale up environmentally sustainable finance internationally; and enhance international coordination on sustainable finance issues, while respecting national and regional contexts.
Keywords: Europe, UK, Banking, Insurance, Securities, Sustainable Finance, IPSF, Climate Change Risk, ESG, Biennial Exploratory Scenario Exercise, Stress Testing, Liquidity Risk, BoE
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The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
The Basel Committee on Banking Supervision (BCBS) issued principles for the effective management and supervision of climate-related financial risks.