PRA to Partly Apply EBA Guidelines on Disclosures for COVID Measures
PRA updated the statement that provides guidance to regulated firms on implementation of the EBA guidelines on reporting and disclosure of exposures subject to measures applied in response to the COVID-19 crisis. In a statement issued on June 24, 2020, PRA had announced that it does not consider it necessary to extend, to UK credit institutions, the supervisory reporting elements of these EBA guidelines. Therefore, firms are not expected to prepare or transmit the reporting templates within these EBA guidelines to PRA. Additionally, PRA had announced that it was considering how the disclosure elements of the EBA guidelines are to be applied. PRA has now updated its earlier statement clarifying its stance on the application of disclosure elements of the EBA guidelines. As per the statement, PRA sees the benefit in disclosures related to these COVID-19 measures, but it plans to implement the EBA guidelines with a number of modifications and is in the process of finalizing the associated disclosure templates.
PRA considers that there is substantial benefit to disclosure-users from public information about the effects of the measures that UK firms have taken in response to the COVID-19 crisis. Nevertheless, PRA intends to exercise the options available in the EBA guidelines to ensure they are implemented in a proportionate manner. Thus, PRA expects that certain UK banks and building societies should make disclosures similar to those prescribed by the EBA guidelines while incorporating a number of modifications that PRA will set out. The UK banks and building societies that should make these disclosures are those that are, or are controlled by, global or other systemically important institutions designated by PRA in the most recent list and those that have retail deposits equal to or greater than GBP 50 billion on an individual or consolidated basis, PRA expects such firms to make these disclosures for the highest level of consolidation in the UK. PRA is finalizing the design of the disclosure templates, including to ensure they capture the full range of payment moratoria available within the UK, and will share these with relevant firms directly in due course.
PRA realizes that there may be practical difficulties caused by the publication of the EBA guidelines and templates and the details of the PRA implementation of the EBA guidelines, close to the June 30, 2020 disclosure reference date. With this in mind, PRA does not expect that firms include these disclosures in the main Pillar 3 disclosures made for the Tuesday June 30, 2020 reporting period and accepts that firms may need to make disclosures for the Tuesday June 30, 2020 reference date at a later time. However, any such delay to the publication of these additional disclosures should be no longer than necessary.
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Keywords: Europe, UK, Banking, COVID-19, Loan Moratorium, Credit Risk, Disclosures, CRR, Basel, EBA, PRA
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