PRA Publishes Templates for COVID-19 Disclosures by Banks in UK
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
- PRA Statement on Disclosure Templates
- Disclosure Templates (XLSX)
- PRA Statement on Disclosures, June 2020
- EBA Guidelines
Keywords: Europe, UK, Banking, COVID-19, Loan Moratorium, Payment Deferrals, Credit Risk, Disclosures, CRR, Basel, Loan Guarantee, FCA, PRA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.
Previous Article
FED Extends Temporary Lending Facilities Amid Ongoing PandemicNext Article
PRA to Assess Distribution Plans of Firms in Q4 2020Related Articles
FED Revises Capital Planning and Stress Testing Requirements for Banks
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.
ECB Releases Results of Bank Lending Survey for Fourth Quarter of 2020
ECB published results of the quarterly lending survey conducted on 143 banks in the euro area.
ESAs Publish Reporting Templates for Financial Conglomerates
ESAs published the final draft implementing technical standards on reporting of intra-group transactions and risk concentration of financial conglomerates subject to the supplementary supervision in EU.
EBA Publishes Report on Asset Encumbrance of Banks in EU
EBA published the annual report on asset encumbrance of banks in EU.
MAS Revises Guidelines on Technology Risk Management
MAS revised the guidelines that address technology and cyber risks of financial institutions, in an environment of growing use of cloud technologies, application programming interfaces, and rapid software development.
US Agencies Publish Updates for Call Reports, FFIEC 101, and FR Y-9C
FED updated the reporting form and instructions for the FR Y-9C report on consolidated financial statements for holding companies.
EBA Proposes Guidelines for Establishing Intermediate Parent Entities
EBA issued a consultation paper on the guidelines on monitoring of the threshold and other procedural aspects of the establishment of intermediate EU parent undertakings, or IPUs, as laid down in the Capital Requirements Directive.
EC Adopts Financial Reporting Changes Arising from Benchmark Reforms
EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.
BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk
BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.
HMT Updates List of Post-Brexit Equivalence Decisions in UK
HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.
