PRA Publishes Q&A on Usability of Liquidity and Capital Buffers
PRA published a set of questions and answers (Q&A) on the usability of liquidity and capital buffers and their operation as set out in PRA rules and guidelines. This document is relevant to all firms to which the Capital Requirements Directive IV applies. The document will be updated as the COVID-19 situation evolves. New Q&As and updates to the existing Q&As will appear in Italics.
In the recent weeks, BoE and its three policy committees have announced a number of measures to help UK businesses and households to bridge across the economic disruption resulting from COVID-19 outbreak. These actions have sought to reduce pressure on banks, building societies, and designated investment firms (also called "banks") while ensuring that the financial system can be a source of strength for the economy during this challenging period. PRA and the Financial Policy Committee have, on several occasions, stated their expectations that all element of substantial capital and liquidity buffers that have been built up by banks exist to be used as necessary to support the economy. This document answers some commonly asked questions on the usability of these capital and liquidity buffers.
Related Link: Q&A
Keywords: Europe, UK, Banking, Q&A, Capital Buffers, Liquidity Risk, Regulatory Capital, COVID-19, PRA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.
Related Articles
BoE Clarifies Approach to Treatment of Payment Holidays on Form PL
BoE published a statistical notice (Notice 2020/9) explaining the approach for treatment of payment holidays on the profit and loss return or Form PL.
BoE Provides Reporting Update on Form AS and Form FV
BoE updated the known issues document for the statistical reporting Forms AS and FV.
FED Announces Capital Requirements for Large Banks
FED announced individual capital requirements for 34 large banks and these requirements go into effect on October 01, 2020.
SRB Publishes Guidance on Implementation of Bail-In Tool
SRB published a set of documents to give operational guidance to banks on implementation of the bail-in tool.
BIS Publishes Update on G20 TechSprint Initiative
BIS published an update on the G20 TechSprint Initiative, which was launched in April 2020 and aims to highlight the potential for technologies to resolve regulatory compliance (regtech) and supervisory (suptech) challenges.
OSFI Provides Update on Implementation of IFRS 17 in Canada
OSFI published a letter that provides an update on the milestones for the implementation of the IFRS 17 standard on insurance contracts.
EBA Provides Clarity on Implementation of Guidance on COVID Reporting
EBA updated the report on the implementation of selected COVID-19 policies.
FSI Note Discusses Challenges Associated with COVID Relief Measures
The Financial Stability Institute (FSI) of BIS published a brief note that examines the supervisory challenges associated with certain temporary regulatory relief measures introduced by BCBS and prudential authorities in response to the COVID-19 pandemic.
BCBS Consults on Principles for Operational Risk and Resilience
BCBS is consulting on the principles for operational resilience and the revisions to the principles for sound management of operational risk for banks.
BoE Updates Template and Definitions for Form ER
BoE updated the reporting template for Form ER as well as the Form ER definitions, which contain guidance on the methodology to be used in calculating annualized interest rates.
