BoE and PRA finalized the resolvability assessment framework for banks in UK. The framework establishes the capabilities firms should have, and the outcomes they must achieve, to be resolvable. The framework is designed to ensure that firms are accountable for their own resolvability. This is done by setting out a clear framework on how BoE will assess firms’ resolvability and by requiring major UK firms to publicly disclose a summary of their own resolvability assessment.
The resolvability assessment framework is implemented by:
- The BoE approach to assessing resolvability, as set out in the Statement of Policy. BoE will assess firms against three resolvability outcomes, which must be met by 2022: having adequate financial resources, being able to continue to do business through resolution and restructuring, and being able to communicate and coordinate within the firm and with authorities. This applies to all UK firms with a bail-in or partial transfer resolution strategy and material UK subsidiaries of overseas-based firms.
- The new requirements of PRA on firms that have been set out in the new Resolution Assessment part of the PRA Rulebook and the accompanying supervisory statement (SS4/19) on resolution assessment and public disclosure by firms. PRA published policy statement (PS15/19), which contains Resolution Assessment part of the PRA Rulebook and SS4/19. PRA rules require major UK banks, with GBP 50 billion or more in retail deposits, to assess their preparations for resolution, submit reports of their assessment to PRA, and publicly disclose a summary of their report. PS15/19 also provides feedback to responses to the consultation paper CP31/18 on. As per the consultation paper, these assessments and disclosures will work on a two-year cycle. Firms will submit the first of the reports on their resolution assessments to PRA by October 2020 and publicly disclose their summaries by June 2021. The new rules will take effect on August 01, 2019.
As part of the new framework, BoE will publicly disclose this assessment for the major UK banks for the first time. The intention is for this to take place at the same time as the firms make their own disclosures. The framework is an important step toward delivering BoE's commitment to Parliament that major UK banks will be resolvable by 2022. Accountability and transparency of firms’ resolvability will increase public awareness of resolution, help market participants make better informed investment decisions, and incentivize firms to meet the resolvability outcomes by 2022. The framework and the resolution regime will allow bank services to continue during and after resolution, so that authorities or new management can restructure the bank as necessary.
- Press Release
- BoE Statement of Policy
- PRA PS15/19
- PRA SS4/19
- Resolution Assessment Part of PRA Rulebook (PDF)
Effective Date: August 01, 2019 (PS15/19)
Keywords: Europe, UK, Banking, Resolvability Assessment Framework, PS 15/19, SS 4/19, CP 31/18, PRA Rulebook, Resolution Planning, PRA, BoE
Previous ArticleBundesbank Publishes Supplementary Validation Rules for Reporting
HKMA has published a circular that sets out the regulatory and reporting treatment for loans that participating authorized institutions may grant to eligible borrowers under the 100% Personal Loan Guarantee Scheme.
ECB published the results of the assessment of internal models that banks use to calculate risk-weighted assets for credit, market, and counterparty credit risks.
PRA published a statement on the regulatory treatment of retail residential mortgage loans under the Mortgage Guarantee Scheme, or MGS.
FCA is consulting, via CP21/7, on the second phase of proposed rules to introduce the UK Investment Firm Prudential Regime (IFPR).
HM Treasury and BoE announced the joint creation of a Central Bank Digital Currency (CBDC) Taskforce to coordinate the exploration of a potential central bank digital currency in UK.
EIOPA published an opinion to set out its expectations on the supervision of the integration of climate change risk scenarios by insurers in their Own Risk and Solvency Assessment (ORSA).
EC published the Implementing Regulation 2021/622 that lays down implementing technical standards for reporting of the minimum requirement for own funds and eligible liabilities (MREL).
BCBS has set out the strategic work priorities, as part of its the work program for 2021-22.
Bundesbank published two circulars on AnaCredit reporting requirements. Circular 27/2021 covers changes to the reporting of branches, additional attributes to be reported for investment funds from August 01, 2021, and updates to the list of international organizations.
PRA published the policy statement PS8/21, which contains the final supervisory statement SS3/21 on the PRA approach to supervision of the new and growing non-systemic banks in UK.