The UK Treasury Sub-Committee on Financial Services Regulations is seeking views, until July 11, 2022, on the Prudential Regulation Authority (PRA) proposals on "Strong and Simple Framework."
Earlier, in April 2022, PRA had published the consultation paper CP5/22 in context of the development a "simpler regime" for the smallest firms, the comment period for which will end on July 22, 2022. The Strong and Simple Framework of PRA seeks to mitigate the "complexity problem" that can arise when the same prudential requirements are applied to all firms regardless of their size and business model, including to control risks and hold adequate capital. The draft proposals aim to simplify the prudential framework for smaller or non-systemic banks and building societies, while maintaining their resilience. The Treasury Sub-Committee proposed a call for evidence to seek stakeholder views on:
- the Strong and Simple Framework proposal and the PRA consultation on this, including whether activities excluded from the framework should be included, whether activities included within the framework should be excluded, and whether the classifications of firms that are included or excluded are appropriate.
- the scope of the Strong and Simple Framework.
- whether the framework proposals are appropriate to safeguard financial stability and the safety and soundness of individual firms.
- whether the framework proposals sufficiently simplify the rules for affected firms.
- how the proposals should be implemented in the context of the Basel 3.1 Standards on Banking Supervision and/or any other relevant international rules or requirements.
- how the proposals should be implemented in the context of firms using their own Internal Ratings-Based models.
- the effect of the framework on competition in the UK market.
- the wording of the draft instrument giving effect to the proposal.
Keywords: Europe, UK, Banking, Basel, Regulatory Capital, Reporting, Strong and Simple Framework, Simpler-Regime Firm, Financial Stability, Internal Models, PRA, UK Treasury Committee
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