Featured Product

    PRA Explains Supervisory Approach to Credit Unions Amid COVID Crisis

    April 08, 2020

    PRA issued a letter explaining its supervisory focus and priorities for credit unions during the period of stress caused by the COVID-19 outbreak. The letter informs about the regulatory reporting extensions granted to credit unions and sets out the details of a PRA rule modification available to all credit unions until January 01, 2021. Credit unions have the option to consent to this modification such that the minimum provisioning requirements for bad debt will be reduced in line with the rates set out in the letter. Additionally, BoE announced that the Term Funding Scheme with additional incentives for Small and Medium-Size Enterprises (TFSME) will open for drawings on April 15, 2020. The scheme allows eligible banks and building societies to access four-year funding at rates very close to the Bank Rate and supports households and businesses during this period of economic disruption.

    PRA has consistently stressed the importance of sound governance, risk management, and general prudence in its past communications with the credit union sector. The letter states that it is crucial for credit unions to be mindful of these principles, especially in light of the current challenges. PRA is mindful of the operational challenges that may make certain aspects of credit union operations and compliance increasingly challenging. Thus, PRA will accept delayed submission for regulatory reports due on or before May 31, 2020. A two-month extension is being granted for annual returns and accounts. A one-month extension is being granted for quarterly returns. However these extensions should only be utilized where a credit union is experiencing challenges. 

    Additionally, where a credit union is either already below its capital requirement or projects to be so, it should notify PRA immediately as required by the Credit Union Rulebook Part 8.6. On receipt of that notification, PRA will engage with credit unions on a case-by-case basis. The starting point for that supervisory dialog is to seek assurance from the credit union on its plan to restore its capital. PRA also highlights that credit unions should be mindful of the liquidity requirements and that it expects credit unions to consider their specific liquidity situation, along with the associated risks, and act accordingly. PRA reiterates that it expects all credit unions to be mindful of their continuing and existing regulatory requirements, as set out in the PRA Credit Union Rulebook Part. PRA rules set out obligations with respect to credit risk management, credit control, record-keeping and the collection of adequate management information.

     

    Related Links

    Keywords: Europe, UK, Banking, COVID-19, SME, Credit Unions, Reporting, Reporting, Regulatory Capital, Liquidity Risk, Term Funding Facility, PRA, BoE

    Featured Experts
    Related Articles
    News

    NGFS Seeks Public Feedback on Climate Risk Assessment Scenarios

    The Network for Greening the Financial System (NGFS) launched its first user feedback survey on climate scenarios, with the feedback period ending on February 27, 2023.

    February 06, 2023 WebPage Regulatory News
    News

    EBA Launches Stress Tests for Banks, Issues Other Updates

    The European Banking Authority (EBA) launched the 2023 European Union (EU)-wide stress test, published annual reports on minimum requirement for own funds and eligible liabilities (MREL) and high earners with data as of December 2021.

    January 31, 2023 WebPage Regulatory News
    News

    EBA Proposes Standards for IRRBB Reporting Under Basel Framework

    The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.

    January 31, 2023 WebPage Regulatory News
    News

    FED Issues Further Details on Pilot Climate Scenario Analysis Exercise

    The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.

    January 17, 2023 WebPage Regulatory News
    News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News
    News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News
    News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News
    News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News
    News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News
    News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8702