The Prudential Regulation Authority (PRA) issued a statement to update its approach to Pillar 2A requirements for banks. In response to the economic shock from COVID-19, PRA announced, on May 07, 2020, that it was alleviating unwarranted pressure on firms by setting the Pillar 2A requirement as a nominal amount, instead of a percentage of total risk-weighted assets (RWAs). PRA had set Pillar 2A as a nominal amount in the 2020 and 2021 Supervisory Review and Evaluation Processes (SREPs) and allowed firms without a 2020 SREP to request this on a voluntary basis, subject to supervisory judgment. However, PRA believes that this regulatory measure is no longer necessary; therefore, in 2022, for all firms, Pillar 2A requirement will be set as a variable amount (with the exception of some fixed add-ons, such as pension risk). Supervisors will contact firms that do not have an SREP assessment planned in 2022 to amend the requirements by end-2022. This statement is relevant for UK banks, building societies, and PRA-designated investment firms as well as UK financial holding companies and UK mixed financial holding companies of certain PRA-authorized firms.
- Statement on Revisions to Pillar 2A Requirements
- Statement on Earlier Pillar2A Requirements, May 2020
Keywords: Europe, UK, Banking, Basel, Pillar 2A, Regulatory Capital, RWA, SREP, COVID-19, PRA
The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.
The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.
The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.
The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.
The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.
The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups
The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.