Featured Product

    PRA Publishes Templates for COVID-19 Disclosures by Banks in UK

    July 28, 2020

    PRA published a statement that provides guidance to regulated firms on the application of EBA guidelines on COVID-19 disclosures. On July 10, 2020, in a statement explaining its stance on the application of disclosure requirements in the EBA guidelines, PRA had clarified that it expects certain UK banks and building societies to make disclosures similar to those prescribed by the EBA guidelines while incorporating a number of modifications set out by PRA. PRA has now published the COVID-19 disclosure templates to be used for this purpose, along with the disclosure timelines.

    PRA published letters in March 2020 and June 2020 to set out guidance to promote consistent and robust application of the definition of default in the Capital Requirements Regulation (CRR), specifically in the context of COVID-19 payment deferrals. The PRA guidance took into account the separate guidance to firms issued by FCA in relation to payment deferrals. Since the form of payment moratoria or similar measures available in the UK may be broader than those specified in the EBA guidelines on legislative and non-legislative moratoria on loan repayments (EBA/GL/2020/02), PRA considers it appropriate for firms to make disclosures that reflect the UK approach to payment deferrals. PRA has produced amended versions of the instructions and definitions. 

    As highlighted in the statement on July 10, 2020, PRA realizes there may be practical difficulties as the EBA guidelines and templates were published close to the June 30, 2020 disclosure reference date. Thus, PRA does not expect firms to include these disclosures in the main disclosures for the June 30, 2020 reporting period and accepts that firms may need to make disclosures for the June 30, 2020 reference date at a later time. This may involve firms making these additional disclosures separately to the main Pillar 3 report for the June 30, 2020 reference date. Disclosures for subsequent reference dates, including December 31, 2020, should be made as part of the Pillar 3 report. Relevant firms should make disclosures in accordance with this letter on a biannual basis. Firms may disclose as at June 30 and December 31, or may disclose at the half-year and year-end dates for their financial year if they have an accounting reference date other than December 31. PRA expects firms to continue making disclosures for reporting periods ending on dates up to and including December 31, 2020. PRA will keep its approach to these disclosures under review for disclosure reference dates after December 31, 2020.

    The UK banks and building societies that should make these disclosures are those that are, or are controlled by, global or other systemically important institution 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. EBA guidelines require firms to make disclosures in three templates. Templates one and two relate to moratoria, while Template three relates to public guarantee schemes. In Templates 1 and 2 firms are being expected to disclose loans and advances that were subject to moratoria on loan repayments applied in light of the COVID-19 crisis and in accordance with the criteria set out in the earlier EBA guidelines.

     

    Related Links

    Keywords: Europe, UK, Banking, COVID-19, Loan Moratorium, Payment Deferrals, Credit Risk, Disclosures, CRR, Basel, Loan Guarantee, FCA, PRA

    Featured Experts
    Related Articles
    News

    ECB Amends Guideline on Temporary Collateral Easing Measures

    ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.

    June 17, 2021 WebPage Regulatory News
    News

    EIOPA Releases Report on Artificial Intelligence Governance Principles

    EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.

    June 17, 2021 WebPage Regulatory News
    News

    HKMA to Increase Focus on Suptech and Regtech Cloud Adoption

    HKMA published the seventh and final issue of the Regtech Watch series, which outlines the three-year roadmap of HKMA to integrate supervisory technology, or suptech, into its processes.

    June 17, 2021 WebPage Regulatory News
    News

    EC Consults on Improving Transparency in Secondary Markets for NPLs

    EC launched a targeted consultation to improve transparency and efficiency in the secondary markets for nonperforming loans (NPLs).

    June 16, 2021 WebPage Regulatory News
    News

    BIS and Nordic Central Banks Launch Innovation Hub in Stockholm

    BIS, Danmarks Nationalbank, Central Bank of Iceland, Norges Bank, and Sveriges Riksbank launched an Innovation Hub in Stockholm, making this the fifth BIS Innovation Hub Center to be opened in the past two years.

    June 16, 2021 WebPage Regulatory News
    News

    FDIC Tech Sprint Aims to Explore Technologies to Reach Unbanked

    FDITECH, the technology lab of FDIC, announced a tech sprint that is designed to explore new technologies and techniques that would help expand the capabilities of community banks to meet the needs of unbanked individuals and households.

    June 16, 2021 WebPage Regulatory News
    News

    EC Releases Sustainable Finance Taxonomy Compass

    EC released the EU Taxonomy Compass, which visually represents the contents of the EU Taxonomy starting with the EU Taxonomy Climate Delegated Act.

    June 16, 2021 WebPage Regulatory News
    News

    FDIC Proposes Amendments to Real Estate Lending Standards

    FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.

    June 15, 2021 WebPage Regulatory News
    News

    EIOPA to Consider Liquidity Risk in Stress Test for 2021

    EIOPA published its annual report, which sets out the work done in 2020 and indicates the planned work areas for the coming months.

    June 15, 2021 WebPage Regulatory News
    News

    ESRB Paper Discusses Measurement of Impact of Bank Failure via Lending

    The ESRB paper that presents an analytical framework that assesses and quantifies the potential impact of a bank failure on the real economy through the lending function.

    June 15, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7116