PRA, National Bank of Slovakia, FIN-FSA, and Central Bank of Hungary (MNB) have notified EBA, ECB, and ESRB about their decisions on the level of systemic risk buffers to be applied to institutions. Additionally, National Bank of Slovakia and FIN-FSA have notified these EU authorities about their decisions on the identification of other systemically important institutions (O-SII) and the activation of O-SII buffer.
PRA notified the mentioned EU authorities about the systemic risk buffer rates for ring-fenced banks (RFBs) and large building societies. PRA has set systemic risk buffer rates for RFBs in five RFB sub-groups—Lloyds Banking Group RFB sub-group, Royal Bank of Scotland RFB sub-group, Barclays RFB sub-group, HSBC RFB sub-group, and Santander UK RFB sub-group—and these systemic risk buffer rates apply to all exposures, on a sub-consolidated basis. PRA has set a systemic risk buffer rate for the Nationwide Building Society at 1%, which applies to all exposures, on a consolidated basis. The systemic risk buffers will apply in full from July 30, 2019. This is the PRA’s first setting of the SRB rates and these rates are expected to be applied until December 31, 2020. PRA expects to review the SRB rates annually, to announce the SRB rates by December 15 of each year, and to require institutions to apply the rates on an ongoing basis by January 01 of the second year ,following the calendar year when the rates were announced. PRA will base its decision of SRB rates on the total assets of the RFB or the building society at the end of the previous calendar year.
Additionally, FIN-FSA notified that it will continue with the existing systemic risk buffers. The systemic risk buffer applies to all credit institutions authorized in Finland at the level of 1.0 % while the systemic risk buffer has been specifically set at 3.0% for Nordea Group, 2.0% for OP-Group, and 1.5% for Municipality Finance Plc. The systemic risk buffer is applied on a consolidated level. Additionally, FIN-FSA assessed the appropriateness of the O-SII buffer as required by law and decided to maintain the level of O-SII buffer at 2.0% for Nordea Group and OP-Group and at 0.5% for Municipality Finance Plc.
- Notification by PRA on Systemic Risk Buffer (PDF)
- Notification by FIN-FSA on Systemic Risk Buffer (PDF)
- Notification by National Bank of Slovakia on Systemic Risk Buffer (PDF)
- Notification by Central Bank of Hungary on Systemic Risk Buffer (PDF)
- Notification by FIN-FSA on O-SII (PDF)
- Notification by National Bank of Slovakia on O-SII (PDF)
Keywords: Europe, UK, Finland, Slovakia, Hungary, Banking, Systemic Risk Buffer, O-SII, Macro-Prudential Measures, Systemic Risk, FIN-FSA, PRA, EBA, ECB, ESRB
The European Commission (EC) published the Delegated Regulation 2021/1527 with regard to the regulatory technical standards for the contractual recognition of write down and conversion powers.
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to provide guidance to authorized deposit-taking institutions on the interpretation of APS 120, the prudential standard on securitization.
The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022.
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.
The European Banking Authority (EBA) published the final report on the guidelines specifying the criteria to assess the exceptional cases when institutions exceed the large exposure limits and the time and measures needed for institutions to return to compliance.
The Prudential Regulation Authority (PRA) issued the policy statement PS20/21, which contains final rules for the application of existing consolidated prudential requirements to financial holding companies and mixed financial holding companies.
The European Banking Authority (EBA) revised the guidelines on stress tests to be conducted by the national deposit guarantee schemes under the Deposit Guarantee Schemes Directive (DGSD).
The European Commission (EC) announced that Nordea Bank has signed a guarantee agreement with the European Investment Bank (EIB) Group to support the sustainable transformation of businesses in the Nordics.
The Hong Kong Monetary Authority (HKMA) issued a circular, for all authorized institutions, to confirm its support of an information note that sets out various options available in the loan market for replacing USD LIBOR with the Secured Overnight Financing Rate (SOFR).
The Office of the Comptroller of the Currency (OCC) issued a new "Problem Bank Supervision" booklet of the Comptroller's Handbook. The booklet covers information on timely identification and rehabilitation of problem banks and their advanced supervision, enforcement, and resolution when conditions warrant.