Featured Product

    PRA Consults on Approach to Supervising Liquidity and Funding Risks

    October 17, 2019

    In consultation paper (CP27/19), PRA published a proposal (CP27/19) to update the supervisory statement SS24/15 on the PRA approach to supervising liquidity and funding risk. The updated SS24/15 will reflect relevant updates to the Market Operations Guide of BoE and to reiterate the relevant expectations set out in SS9/17 on recovery planning. The consultation closes on November 17, 2019, with PRA proposing to apply the draft amendments to SS24/15 from the date of final publication.

    The updates to SS24/15 propose that there should be no presumptive order in which firms should use the BoE liquidity facilities, including the Discount Window Facility, or draw down their own liquid asset buffers to meet a liquidity need. Firms would be expected to use their own judgment in applying for and using the BoE liquidity facilities. The proposals align the view of the appropriate usage of BoE facilities in SS24/15 with the Market Operations Guide. The proposed updates to SS24/15 would also reiterate that where firms view central bank liquidity facilities, including at BoE, as part of the their liquidity risk management strategy, PRA would expect this to be included as part of the credible recovery options outlined in the firms’ recovery plans.

    BoE also published its Market Operations Guide, which outlines the BoE framework for its operations in sterling money markets and updates the Sterling Market Framework (formally known as the Red Book). The Market Operations Guide reiterates that there is a presumption that banks and building societies that meet the PRA Threshold Conditions for authorization may sign up to the Sterling Market Framework and gain access to borrowing under the Sterling Market Framework against eligible collateral. It also notes that BoE does not consider that there is a presumptive order of usage between the Sterling Market Framework and a firm’s liquid asset buffers. CP27/19 proposes to update SS24/15 so that it aligns with the updated Sterling Market Framework as set out in the Market Operations Guide. CP27/19 is relevant to PRA-authorized UK banks, building societies, and PRA-designated UK investment firms, referred to collectively as firms. The proposals have been designed in the context of the current UK and EU regulatory framework. PRA has assessed that the proposals will not be affected in the event that UK leaves EU with no implementation period in place.

     

    Related Links

    Comment Due Date: November 17, 2019

    Effective Date: Publication Date of Final Policy (Proposed)

    Keywords: Europe, UK, Banking, Liquidity Risk, Market Operations Gide, Recovery Planning, CP 27/19, SS 24/15, PRA, BoE

    Featured Experts
    Related Articles
    News

    APRA Consults to Standardize Submission Date for Quarterly Reporting

    APRA proposed to standardize quarterly reporting due dates for authorized deposit-taking institutions. The proposed standardized due date is 35 calendar days after the last day of the reference quarter, which will create a 14-calendar-day extension for credit unions and building societies.

    November 08, 2019 WebPage Regulatory News
    News

    EBA Publishes Methodology and Draft Templates for Stress Tests in 2020

    EBA published a package for the 2020 EU-wide stress test exercise for banks.

    November 07, 2019 WebPage Regulatory News
    News

    EC Publishes Results of Fitness Check of Reporting Requirements in EU

    EC published results of the fitness check of supervisory reporting requirements in financial services legislation in EU.

    November 07, 2019 WebPage Regulatory News
    News

    BCBS Assesses NSFR and LE Rules in Argentina and China as Compliant

    BCBS published reports that assess the implementation of net stable funding ratio (NSFR) and large exposures, or LE, framework in Argentina and China.

    November 07, 2019 WebPage Regulatory News
    News

    FSB Publishes Summary of Plenary Meeting in Paris

    At the meeting, the Plenary reviewed vulnerabilities in the global financial system, fintech developments (including developments in the crypto-asset markets), ongoing work of FSB, and the work program for 2020.

    November 07, 2019 WebPage Regulatory News
    News

    HKMA Highlights Technology Initiatives at the Hong Kong FinTech Week

    HKMA co-organized, with InvestHK, the Hong Kong FinTech Week 2019, which was a five-day flagship fintech event that attracted thousands of attendees worldwide.

    November 06, 2019 WebPage Regulatory News
    News

    ECB Report on Fallback Provisions in Contracts Referencing EURIBOR

    ECB published a report, by private sector working group on euro risk-free rates, presenting recommendations for fallback provisions in contracts for cash products and derivative transactions referencing EURIBOR.

    November 06, 2019 WebPage Regulatory News
    News

    EC Regulation on Homogeneity of Underlying Exposures in Securitization

    EC published the Delegated Regulation 2019/1851 regarding the regulatory technical standards on the homogeneity of the underlying exposures in securitization.

    November 06, 2019 WebPage Regulatory News
    News

    FSI Examines Regulatory Approaches on Climate Risk Assessment

    The Financial Stability Institute (FSI) of BIS published a paper that examines the regulatory approaches being used for climate risk assessment in the insurance sector, in particular through enterprise risk management (ERM) frameworks.

    November 06, 2019 WebPage Regulatory News
    News

    SRB Launches Q&A Process for Resolution Reporting

    SRB has setup a dedicated solution for raising questions on the resolution reporting.

    November 06, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 4112