Featured Product

    PRA Proposes Tighter Limit for Large Exposures to Certain French NFCs

    July 16, 2019

    PRA is proposing (CP15/19) to apply a tighter limit for large exposures to certain French non-financial corporations (NFCs), to reciprocate the measure imposed by France. The proposal would be effected through amendments to the Large Exposures Part of the PRA Rulebook (Appendix 1). PRA proposes to tighten the large exposures limit to 5% of eligible capital in respect of the exposures of UK global systemically important institutions (G-SIIs) and other systemically important institutions (O-SIIs) to French NFCs. The proposed measure applies under the Capital Requirements Directive, or CRD, as implemented in the Capital Requirements (Capital Buffers and Macro-prudential measures) Regulations 2014. The planned implementation date for the proposal in CP15/19 is January 01, 2020. The consultation closes on September 06, 2019.

    ESRB has recommended a European Economic Area (EEA) wide reciprocation of a macro-prudential measure imposed by Haut Conseil de stabilité financière (HCSF) in France in July 2018, under the Capital Requirements Regulation, or CRR Article 458 (the HCSF measure). PRA proposes to tighten the large exposures limit to 5% of eligible capital in respect of the exposures of UK G-SIIs and O-SIIs to French NFCs meeting the definition of "highly indebted," as set out in the HCSF measure. The limit will apply on a consolidated basis to exposures with an original value (prior to the application of any credit risk mitigation techniques and exemptions under the Large Exposures Part of the CRR) of greater than EUR 300 million, treating exposures to a group of connected French NFCs as a single exposure.

    The proposed rule incorporates the materiality threshold in the ESRB Recommendation. The threshold exempts firms that have an aggregate exposure to the French NFC sector (on a consolidated basis) of less than EUR 2 billion (prior to the application of any credit risk mitigation techniques and exemptions under the Large Exposures part of the CRR). The materiality threshold also exempts firms that do not have relevant exposures greater than both EUR 300 million and 5% of eligible capital to a single French NFC, or a "connected group" of French NFCs.

    The proposals set out in CP15/19 have been designed in the context of the current UK and EU regulatory framework. PRA has assessed that the proposal will be affected in the event that UK leaves EU with no implementation period in place. A second version of the proposed amendments to PRA Rulebook rules, which includes the relevant changes related to the withdrawal of UK from EU, is set out in Appendix 2.

     

    Related Links

    Comment Due Date: September 06, 2019

    Effective Date: January 01, 2020 (Planned)

    Keywords: Europe, UK, France, Banking, Large Exposures, CRR, CRD, PRA rulebook, HCSF Measure, G-SII, O-SII, CP 15/19, Concentration Risk, PRA

    Featured Experts
    Related Articles
    News

    OSFI Outlines Prudential Policy Priorities for Coming Months

    OSFI has set out the near-term priorities for federally regulated financial institutions and federally regulated private pension plans for the coming months until March 31, 2022.

    May 06, 2021 WebPage Regulatory News
    News

    BIS Announces TechSprint on Innovative Green Finance Solutions

    Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance.

    May 06, 2021 WebPage Regulatory News
    News

    EBA Proposed Regulatory Standards for Central Database on AML/CFT

    EBA proposed the regulatory technical standards on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in EU.

    May 06, 2021 WebPage Regulatory News
    News

    ECB Responds to EC Consultation on Crisis Management Framework

    ECB published its response to the targeted EC consultation on the review of the bank crisis management and deposit insurance framework in EU.

    May 06, 2021 WebPage Regulatory News
    News

    ACPR Publishes Version 1.0.0 of RUBA Taxonomy

    ACPR published Version 1.0.0 of the RUBA taxonomy, which will come into force from the decree of January 31, 2022.

    May 06, 2021 WebPage Regulatory News
    News

    BCBS, CPMI, and IOSCO to Survey Market Participants on Margin Calls

    BCBS, CPMI, and IOSCO (the Committees) are inviting entities that participate in market infrastructures and securities markets through an intermediary as well as non-bank intermediaries to complete voluntary surveys on the use of margin calls.

    May 05, 2021 WebPage Regulatory News
    News

    ECB Amends Decision on TLTRO III

    ECB published Decision 2021/752 to amend Decision 2019/1311 on the third series of targeted longer-term refinancing operations or TLTRO III.

    May 05, 2021 WebPage Regulatory News
    News

    Central Bank of Ireland Issues Draft Template for AnaCredit Reporting

    The Central Bank of Ireland published Version 2.7 of the draft credit data template and rules for monthly AnaCredit reporting by banks.

    May 05, 2021 WebPage Regulatory News
    News

    OSFI Consults on Revisions to BCAR and Leverage Requirements Returns

    OSFI proposed revisions to the Basel Capital Adequacy Reporting (BCAR) and leverage requirements returns for the 2023 reporting, with the comment period ending on July 09, 2021.

    May 04, 2021 WebPage Regulatory News
    News

    EBA Seeks Views on Revisions to Nonperforming Loan Data Templates

    EBA published a discussion paper on review of the standardized nonperforming loans (NPL) transaction data templates, along with the proposed revised NPL data templates.

    May 04, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6936