PRA Publishes Templates for COVID-19 Disclosures by Banks in UK
PRA published a statement that provides guidance to regulated firms on the application of EBA guidelines on COVID-19 disclosures. On July 10, 2020, in a statement explaining its stance on the application of disclosure requirements in the EBA guidelines, PRA had clarified that it expects certain UK banks and building societies to make disclosures similar to those prescribed by the EBA guidelines while incorporating a number of modifications set out by PRA. PRA has now published the COVID-19 disclosure templates to be used for this purpose, along with the disclosure timelines.
PRA published letters in March 2020 and June 2020 to set out guidance to promote consistent and robust application of the definition of default in the Capital Requirements Regulation (CRR), specifically in the context of COVID-19 payment deferrals. The PRA guidance took into account the separate guidance to firms issued by FCA in relation to payment deferrals. Since the form of payment moratoria or similar measures available in the UK may be broader than those specified in the EBA guidelines on legislative and non-legislative moratoria on loan repayments (EBA/GL/2020/02), PRA considers it appropriate for firms to make disclosures that reflect the UK approach to payment deferrals. PRA has produced amended versions of the instructions and definitions.
As highlighted in the statement on July 10, 2020, PRA realizes there may be practical difficulties as the EBA guidelines and templates were published close to the June 30, 2020 disclosure reference date. Thus, PRA does not expect firms to include these disclosures in the main disclosures for the June 30, 2020 reporting period and accepts that firms may need to make disclosures for the June 30, 2020 reference date at a later time. This may involve firms making these additional disclosures separately to the main Pillar 3 report for the June 30, 2020 reference date. Disclosures for subsequent reference dates, including December 31, 2020, should be made as part of the Pillar 3 report. Relevant firms should make disclosures in accordance with this letter on a biannual basis. Firms may disclose as at June 30 and December 31, or may disclose at the half-year and year-end dates for their financial year if they have an accounting reference date other than December 31. PRA expects firms to continue making disclosures for reporting periods ending on dates up to and including December 31, 2020. PRA will keep its approach to these disclosures under review for disclosure reference dates after December 31, 2020.
The UK banks and building societies that should make these disclosures are those that are, or are controlled by, global or other systemically important institution designated by PRA in the most recent list and those that have retail deposits equal to or greater than GBP 50 billion on an individual or consolidated basis. PRA expects such firms to make these disclosures for the highest level of consolidation in the UK. EBA guidelines require firms to make disclosures in three templates. Templates one and two relate to moratoria, while Template three relates to public guarantee schemes. In Templates 1 and 2 firms are being expected to disclose loans and advances that were subject to moratoria on loan repayments applied in light of the COVID-19 crisis and in accordance with the criteria set out in the earlier EBA guidelines.
Related Links
- PRA Statement on Disclosure Templates
- Disclosure Templates (XLSX)
- PRA Statement on Disclosures, June 2020
- EBA Guidelines
Keywords: Europe, UK, Banking, COVID-19, Loan Moratorium, Payment Deferrals, Credit Risk, Disclosures, CRR, Basel, Loan Guarantee, FCA, 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.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
BaFin Plans to Expand Internal Resolution Teams Bail-In GuidanceRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
