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.
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous Article
CMF Extends Application Period for Accounting Standard ProvisionsRelated Articles
FDIC Proposes Amendments to Real Estate Lending Standards
FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.
ISDA Consults on Implementation of Fallbacks for Certain Swap Rates
ISDA is consulting on the implementation of fallbacks for the sterling LIBOR ICE Swap Rate and for the USD LIBOR ICE Swap Rate.
BIS and BoE Launch Innovation Hub in London
BIS and BoE launched the BIS Innovation Hub Center in London, which is the fourth new Innovation Hub Centre to be opened in the past two years.
ESRB Recommends Reciprocation of Certain Macroprudential Measures
ESRB published recommendations on the reciprocation of macro-prudential measures in Belgium, France, Luxembourg, Norway, and Sweden.
US Agencies Set Out Unified Agenda for Planned Regulatory Actions
SEC announced that the Office of Information and Regulatory Affairs released the Spring 2021 Unified Agenda of Regulatory and Deregulatory Actions.
EC Publishes Regulation on Key Aspects of Implementation of SA-CCR
EC published the Delegated Regulation 2021/931, which supplements the Capital Requirements Regulation (CRR or Regulation 575/2013) with regard to the regulatory technical standards specifying the method for identifying derivative transactions with one or more than one material risk driver.
BCBS Consults on Prudential Treatment of Cryptoasset Exposures
BCBS is consulting on preliminary proposals for the prudential treatment of cryptoasset exposures of banks.
EBA Revises List of Validation Rules for Reporting
EBA issued a revised list of validation rules under the implementing technical standards on supervisory reporting.
Banking Authorities and Private Sector Collaborate on Wholesale CBDC
BIS Innovation Hub, BDF, and SNB announced that, together with a private-sector consortium led by Accenture, they will conduct an experiment using wholesale central bank digital currency (wCBDC) for cross-border settlement.
ESAs Publish Amended Implementing Standards on Mapping of ECAIs
ESAs published two amended implementing technical standards on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs).
