PRA issued a statement confirming that it will undertake an assessment of the distribution plans of firms beyond the end of 2020. PRA will conduct this assessment in the fourth quarter of 2020. The assessment will be based on the current and projected capital positions of the banks and will take into account the level of uncertainty on the future path of the economy, market conditions, and capital trajectories prevailing at that time.
Earlier, on March 31, 2020, PRA had issued a statement welcoming the decisions by the boards of the large UK banks to suspend dividends and buybacks on ordinary shares until the end of 2020 and to cancel payments of any outstanding 2019 dividends in response to the PRA request. PRA had also set out its expectation that banks would not pay cash bonuses to senior staff. PRA regards distributions as an important and necessary part of the functioning of the banking system; however, these decisions were a sensible precautionary step, given the unique role of banks in supporting the wider economy through the period of economic disruption.
Keywords: Europe, UK, Baking, COVID-19, Dividend Distribution, Share Buybacks, Cash Bonuses, Distribution Plans, Regulatory Capital, Basel, PRA
Previous ArticlePRA Publishes Templates for COVID-19 Disclosures by Banks in UK
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.