Featured Product

    PRA Revises Approach to Reporting and Disclosures Amid COVID-19 Crisis

    June 26, 2020

    PRA published a statement that outlines its revised approach to regulatory reporting and Pillar 3 disclosures for banks in response to the COVID-19 outbreak. The statement highlights that PRA will expect on-time submission for future regulatory reporting—that is, for submission of returns with deadline of June onward. Going forward, PRA expects that the publication timeline for Pillar 3 disclosures should not be affected by COVID-19 in most cases. However, PRA will continue to take a flexible approach in its expectations of firms’ publication timeline for Pillar 3 disclosures (compared to the publication date of the financial statements). Additionally, PRA published an update to its statement on the regulatory treatment of the UK Coronavirus Business Interruption Loan Scheme (CBILS) and the UK Coronavirus Large Business Interruption Loan Scheme (CLBILS) to include clarifications on the application of credit risk approaches for firms.

    PRA has provided following clarifications on the application of credit risk approaches for firms:

    • Clarification for firms using the standardized approach for exposures to the obligor. The portion of an exposure benefiting from the protection of a guarantee provided by the Secretary of State under the schemes is assigned the relevant sovereign risk-weight prescribed by the standardized approach. The residual part of the exposure—that is, the portion that does not benefit from the protection of a guarantee provided under these schemes—is assigned the standardized approach risk-weight that would apply if the exposure were not guaranteed.
    • Clarification for firms using the internal ratings-based (IRB) approach for exposures to the obligor and the standardized approach for exposures to the guarantor (under permanent partial use or rollout). The portion of an exposure benefiting from the protection of a guarantee provided by the Secretary of State under the schemes is assigned the relevant sovereign risk weight prescribed by the standardized approach. The residual part of the exposure is risk-weighted according to the relevant approved IRB approach as if the exposure were not guaranteed.
    • Clarification for firms using the IRB approach for exposures to the obligor and the IRB approach for exposures to the guarantor. Firms should adopt an approach to reflect the effect of the guarantee provided by the Secretary of State that is consistent with their approved IRB models and their IRB permissions.

    Coming back to the statement on regulatory reporting, PRA, in April 2020, had issued a statement setting out that it would accept delayed submission of certain regulatory returns with deadlines on or before May 31, 2020. That statement noted that PRA would consider in due course the treatment of those returns with a deadline of June onward. Having considered that firms have now had time to adjust to new ways of working and the prudential benefits to supervisors of the timely submission of regulatory data, PRA has concluded that it would not be appropriate to continue to apply the reporting measures set out in the statement to future submissions. Firms experiencing difficulty with timely submission should contact their usual supervisor to discuss. 

     

    Related Links

    Keywords: Europe, UK, Banking, COVID-19, Reporting, Disclosures, Basel, Credit Risk, CBILS, CLBILS, Loan Guarantee, Standardized Approach, IRB Approach, PRA

    Featured Experts
    Related Articles
    News

    BIS Paper Studies Impact of Fintech Lending on Small Businesses in US

    The Bank for International Settlements (BIS) published a paper that studies impact of fintech lending on credit access for small businesses in U.S.

    September 26, 2022 WebPage Regulatory News
    News

    UK Regulators Issue CRR Changes and Stress Test Scenarios for Banks

    The Prudential Regulation Authority (PRA) issued the policy statement PS8/22 to amend the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook and update the supervisory statement SS7/13 titled "Definition of capital (CRR firms).

    September 26, 2022 WebPage Regulatory News
    News

    EBA Launches EU-Wide Transparency Exercise in 2022

    The European Banking Authority (EBA) launched the EU-wide transparency exercise for 2022, with results of the exercise expected to be published at the beginning of December, along with the annual Risk Assessment Report.

    September 23, 2022 WebPage Regulatory News
    News

    SRB on CRR Quick-Fix to Policy for Multiple Point of Entry Banks

    The Single Resolution Board (SRB) welcomed the adoption of the review of the Capital Requirements Regulation, or CRR, also known as the "CRR quick-fix."

    September 22, 2022 WebPage Regulatory News
    News

    EC Rule Lists Advanced Economies for Market Risk Capital Calculations

    The European Commission (EC) recently adopted the Delegated Regulation 2022/1622, which sets out the regulatory technical standards to specify the countries that constitute advanced economies for the purpose of specifying risk-weights for the sensitivities to equity.

    September 21, 2022 WebPage Regulatory News
    News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News
    News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News
    News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    News

    MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures

    The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.

    September 15, 2022 WebPage Regulatory News
    News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8521