Featured Product

    BoE and PRA Revise Resolution Policy for Banks

    May 28, 2021

    BoE and PRA updated the resolution policy for banks in UK, following a package of proposals issued in October 2020. The package of proposals included a BoE consultation paper on updates to its approach to assessing resolvability (Resolvability Assessment Framework), the PRA consultation paper on amendments to the reporting and disclosure dates of resolution assessments (CP19/20), and the PRA proposal on updates to the policy on operational continuity in resolution, also known as OCIR (CP20/20). PRA has now published policy statements (PS9/21 and PS10/21) that contain responses to CP20/20 and CP19/20 and the final policy with respect to the operational continuity in resolution and the amendments to reporting and disclosure dates of resolution assessment. Additionally, BoE has published the updated Statements of Policy on the Resolvability Assessment Framework.

    PS9/21:The PRA policy statement on operational continuity in resolution contains amendments to the Operational Continuity Part of the PRA Rulebook (Appendix 1) and a new supervisory statement (SS4/21) on ensuring operational continuity in resolution, which will supersede SS9/16 (Appendix 2). The amended Operational Continuity Part and SS4/21 both will be effective from January 01, 2023, until which time SS9/16 will remain in place. 

    PS10/21:The PRA policy statement on amendments to reporting and disclosure dates contains amendments to Rules 3.1(1) and 4.1(1) in the Resolution Assessment Part of the PRA Rulebook (Appendix 1) and an updated SS4/19 on resolution assessment and public disclosure by firms (Appendix 2). The amendments to Resolution Assessment 3.1(1) and 4.1(1) will be effective from June 02, 2021. The amendments to SS4/19 took effect on publication of PS10/21 on May 28, 2021. Firms must submit their first report by October 01, 2021. Thereafter, firms must submit their report biennially by the first Friday in October of the relevant calendar year. As part of the preparations for implementing the revised operational continuity in resolution policy, firms should submit to PRA their plan for implementing the policy by February 18, 2022. Firms are encouraged to submit this plan, along with any other updates they may have to their reports, as they progress their implementation of capabilities ahead of the compliance deadline of January 01, 2022 of the Statement of Policy on Resolvability Assessment Framework. Firms must publish their first public disclosure by June 10, 2022. Thereafter, firms must publish their public disclosure biennially by the second Friday in June of the relevant calendar year.

    Statement of Policy: The BoE Statement of Policy on Resolvability Assessment Framework sets out how BoE, as the designated resolution authority, intends to assess the resolvability of individual firms and the resolvability outcomes it deems necessary to support resolution. BoE has updated the Operational Continuity in Resolution section of the Statement of Policy as well as the sections where firms’ submissions and disclosures under the Resolution Assessment Part of the PRA Rulebook in 2020/21 were mentioned. In light of the final OCIR policy of PRA, BoE also clarified the following:

    • Remove references to the term “essential services” from the Statement of Policy on approach to assessing resolvability as well as Statement of Policy on management, governance, and communication; this is to reflect the PRA decision in final policy not to introduce the term “essential services,” but instead to amend the definition of critical services in the Operational Continuity Part of the PRA Rulebook to refer to both critical functions and core business lines.
    • The BoE assessment of the resolvability of firms during 2021 and 2022 will focus on the PRA Operational Continuity in Resolution policy that came into force on January 01, 2019, taking into account the January 01, 2023 effective date for the revised Operational Continuity in Resolution policy of PRA. This will also be reflected in the public statements of BoE regarding the resolvability of the major UK firms.

     

    Related Links

    Effective Date: January 01, 2023 (SS4/21), June 02, 2021 (PRA Rulebook), May 28, 2021 (SS4/19)

    Keywords: Europe, UK, Banking, Resolution Framework, Operational Continuity, PRA Rulebook, Governance, Resolvability Assessment, Statement of Policy, Reporting, Disclosures, PRA, BoE

    Featured Experts
    Related Articles
    News

    OSFI Issues Results of Pilot on Climate Risk Scenario Analysis

    The Office of the Superintendent of Financial Institutions (OSFI) published an update on the discussion paper that intended to engage federally regulated financial institutions and other interested stakeholders in a dialog with OSFI, to proactively enhance and align assurance expectations over key regulatory returns.

    January 20, 2022 WebPage Regulatory News
    News

    EC Issues Regulation on Adjustments to K-Factor Coefficients Under IFR

    The European Commission (EC) published a report summarizing responses to the targeted consultation on the supervisory convergence and the single rulebook in the European Union (EU).

    January 20, 2022 WebPage Regulatory News
    News

    ECB Issues Opinions on Green Bonds Standard and CRR Proposals

    The European Central Bank (ECB) published its opinion on a proposal for a regulation on European green bonds, following a request from the European Parliament.

    January 19, 2022 WebPage Regulatory News
    News

    ESRB Explores Policy Response to Risks Arising from Digitalization

    The Advisory Scientific Committee (ASC) of the European Systemic Risk Board (ESRB) published a report that explores the expected impact of digitalization on provision of financial and banking services, and proposes policy measures to address the risks stemming from digitalization.

    January 18, 2022 WebPage Regulatory News
    News

    HKMA Consults on FIRO Code, Revises Policy on Foreign Exchange Risk

    The Hong Kong Monetary Authority (HKMA) is consulting on the draft Financial Institutions (Resolution) Ordinance (Cap. 628), or FIRO, Code of Practice chapter on liquidity and funding in resolution, until March 14, 2022.

    January 18, 2022 WebPage Regulatory News
    News

    FI Publishes Multiple Regulatory and Reporting Updates

    The Swedish Financial Supervisory Authority (FI) announced that the capital adequacy reporting as at December 31, 2021 must be done by February 11, 2022.

    January 17, 2022 WebPage Regulatory News
    News

    EU Authorities Address COVID-19 Reporting, MCD, and PSD2 Issues

    The European Banking Authority (EBA) announced that the guidelines on the reporting and disclosure of exposures subject to measures COVID-relief measures shall continue to apply until further notice.

    January 17, 2022 WebPage Regulatory News
    News

    BSP Tackles Aspects of Lending and Islamic, Open & Sustainable Finance

    The Central Bank of the Philippines (BSP) issued communications covering developments related to online lending platforms, open finance framework and roadmap, and on the expected regulations in the area sustainable finance.

    January 16, 2022 WebPage Regulatory News
    News

    US Agencies Issue Regulatory Updates, FDIC Launches Tech Sprint

    The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.

    January 13, 2022 WebPage Regulatory News
    News

    EBA Issues Guide on Bank Resolvability, Consults on Transferability

    The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).

    January 13, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 7903