BoE and PRA on ESRB Recommendation for Payout Restrictions Amid Crisis
BoE and PRA issued a joint statement on the ESRB recommendation for restriction of dividend distributions and other relevant voluntary payouts during the COVID-19 pandemic. The statement refers to the ESRB recommendation that was issued on June 08, 2020 and is applicable to the UK authorities during the transition period, which is a part of the withdrawal of UK from EU. The statement highlights that BoE and PRA have previously announced a number of measures to ensure the resilience of the financial system and financial market infrastructures, support bank lending through this period, and maintain the safety and soundness of firms, which are consistent with the objectives of the ESRB recommendation. Therefore, BoE and PRA do not consider it necessary to extend the guidance further at this time.
ESRB recommended that the relevant authorities should request financial institutions under their supervisory remit to refrain—at least until January 01, 2021—from undertaking the actions that have the effect of reducing the quantity or quality of own funds at the EU group level (or at the individual level where the financial institution is not part of an EU group), and, where appropriate, at the sub-consolidated or individual level. The actions to be refrained from include dividend distribution, buy-back of ordinary shares, and creation of an obligation to pay variable remuneration to a material risk-taker.
Related Links
Keywords: Europe, EU, UK, Banking, Insurance, COVID-19, Brexit, Dividend Distribution, FMI, PRA, BoE
Previous Article
APRA Updates Guidance on Capital Management for BanksRelated Articles
HKMA Announces Repayment Deferment Under Payment Holiday Scheme
HKMA, together with the Banking Sector Small and Medium-Size Enterprise (SME) Lending Coordination Mechanism, announced a ninety-day repayment deferment for trade facilities under the Pre-approved Principal Payment Holiday Scheme.
ESRB Paper Presents Alternative Approach to EBA Stress Test Proposal
The Advisory Scientific Committee of ESRB published a response, in the form of an Insights Paper, to the EBA proposals for reforms to the stress testing framework in EU.
MAS Announces Key Initiatives to Support Adoption of SORA
MAS announced several initiatives to support adoption of the Singapore Overnight Rate Average (SORA), which is administered by MAS.
BoE Updates Template and Definitions for Form ER
BoE updated the reporting template for Form ER as well as the Form ER definitions, which contain guidance on the methodology to be used in calculating annualized interest rates.
PRA to Extend Temporary High Balance Coverage Amid COVID Crisis
PRA published the policy statement PS19/20 on the final policy for extending coverage under the Financial Services Compensation Scheme (FSCS) for Temporary High Balance.
EBA Publishes Standards on Disclosure and Reporting of MREL and TLAC
EBA published the final draft implementing technical standards for disclosures and reporting on the minimum requirements for own funds and eligible liabilities (MREL) and the total loss-absorbing capacity (TLAC) requirements in EU.
EBA Releases Erratum for Phase 2 Package on Reporting Framework 2.10
EBA published an erratum for the phase 2 of technical package on the reporting framework 2.10.
EC Sets Out Updated Technical Information for Solvency II Calculations
EC published the Implementing Regulation 2020/1145, which lays down technical information for calculation of technical provisions and basic own funds.
US Agencies Issue Statement on Additional COVID-19 Loan Accommodations
FFIEC, on behalf of its members that include US Agencies such as CFPB, FDIC, FED, NCUA, and OCC, issued a joint statement that sets out prudent risk management and consumer protection principles for financial institutions to consider while working with borrowers.
PRA Consults on Implementation of Certain Provisions of CRD5
PRA, via the consultation paper CP12/20, proposed changes to its rules, supervisory statements, and statements of policy to implement certain elements of the Capital Requirements Directive (CRD5).
