PRA published a policy statement (PS3/20) that provides updates to certain supervisory statements (SS20/15, SS28/15, and SS35/15) and statements of policy (SoP). The proposals on these updates were covered in Chapters 2 and 3 of an occasional consultation paper CP25/19. The proposals in chapter 2 were to update SS20/15 on supervising building societies’ treasury and lending activities (Appendix 1) and Statement of Policy on the methodologies for setting Pillar 2 capital (Appendix 2) to remove references to the London Inter-Bank Offered Rate (LIBOR). In chapter 3, PRA proposed to update certain redundant references and make minor corrections to SS28/15 on strengthening individual accountability in banking (Appendix 3) and to SS35/15 on strengthening individual accountability in insurance (Appendix 4). PRA received no responses to these chapters of CP25/19 and has, therefore, made no changes to the draft policy.
PS3/20 will take effect from its date of publication. The policy set out in PS3/20 has been designed in context of the Brexit and the entry of UK into the transition period, during which time the 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 EU take effect. PRA has assessed that the proposals would not need to be amended under the EU (Withdrawal) Act 2018 at the end of the transition period.
PRA plans to publish feedback and final policy for chapter 5 of the CP25/19, alongside the final policy for CP21/19 on probability of default and loss given default estimation under credit risk at a later date, as both consultations proposed changes to SS11/13 on the internal ratings-based approaches.
Effective Date: February 24, 2020
Keywords: Europe, UK, Banking, Insurance, Securities, PS 3/20, CP 25/19, Pillar 2, IRB Approach, Credit Risk, LIBOR, PRA
Previous ArticleIAIS Publishes Newsletter for February 2020
The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.
The European Insurance and Occupational Pensions Authority (EIOPA) published a report assessing insurers' exposure to physical climate change risks
The European Commission (EC) published the results of a public consultation, held in October 2021, on the review of the Web Accessibility Directive.
The Network for Greening the Financial System (NGFS) published two reports to aid central banks and regulators in their oversight of the financial sector and in their central bank operations
The Monetary Authority of Singapore (MAS) and the SC-STS are jointly consulting, until June 10, 2022, on setting adjustment spreads for the conversion of legacy SOR contracts to SORA reference rate.
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.