PRA, National Bank of Slovakia, FIN-FSA, and Central Bank of Hungary (MNB) have notified EBA, ECB, and ESRB about their decisions on the level of systemic risk buffers to be applied to institutions. Additionally, National Bank of Slovakia and FIN-FSA have notified these EU authorities about their decisions on the identification of other systemically important institutions (O-SII) and the activation of O-SII buffer.
PRA notified the mentioned EU authorities about the systemic risk buffer rates for ring-fenced banks (RFBs) and large building societies. PRA has set systemic risk buffer rates for RFBs in five RFB sub-groups—Lloyds Banking Group RFB sub-group, Royal Bank of Scotland RFB sub-group, Barclays RFB sub-group, HSBC RFB sub-group, and Santander UK RFB sub-group—and these systemic risk buffer rates apply to all exposures, on a sub-consolidated basis. PRA has set a systemic risk buffer rate for the Nationwide Building Society at 1%, which applies to all exposures, on a consolidated basis. The systemic risk buffers will apply in full from July 30, 2019. This is the PRA’s first setting of the SRB rates and these rates are expected to be applied until December 31, 2020. PRA expects to review the SRB rates annually, to announce the SRB rates by December 15 of each year, and to require institutions to apply the rates on an ongoing basis by January 01 of the second year ,following the calendar year when the rates were announced. PRA will base its decision of SRB rates on the total assets of the RFB or the building society at the end of the previous calendar year.
Additionally, FIN-FSA notified that it will continue with the existing systemic risk buffers. The systemic risk buffer applies to all credit institutions authorized in Finland at the level of 1.0 % while the systemic risk buffer has been specifically set at 3.0% for Nordea Group, 2.0% for OP-Group, and 1.5% for Municipality Finance Plc. The systemic risk buffer is applied on a consolidated level. Additionally, FIN-FSA assessed the appropriateness of the O-SII buffer as required by law and decided to maintain the level of O-SII buffer at 2.0% for Nordea Group and OP-Group and at 0.5% for Municipality Finance Plc.
- Notification by PRA on Systemic Risk Buffer (PDF)
- Notification by FIN-FSA on Systemic Risk Buffer (PDF)
- Notification by National Bank of Slovakia on Systemic Risk Buffer (PDF)
- Notification by Central Bank of Hungary on Systemic Risk Buffer (PDF)
- Notification by FIN-FSA on O-SII (PDF)
- Notification by National Bank of Slovakia on O-SII (PDF)
Keywords: Europe, UK, Finland, Slovakia, Hungary, Banking, Systemic Risk Buffer, O-SII, Macro-Prudential Measures, Systemic Risk, FIN-FSA, PRA, EBA, ECB, ESRB
Previous ArticleIMF Technical Notes Assess Financial Sector in Poland
In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.
The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.
The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.
The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.
The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.
Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.
The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.
The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.