Featured Product

    PRA Further Reprioritizes Work to Support Firms Amid COVID Crisis

    May 07, 2020

    PRA published a statement detailing plans to support firms in focusing their resources on the highest priority work amid COVID-19 outbreak. The announcement covers tasks related to climate change risks, calculation of stressed value-at-risk (SVAR), data reporting for LIBOR transition, and postponement of the insurance stress test. Overall, PRA continues to consider and make other adjustments to ease the burden on regulated entities. BoE also published its interim financial stability report, which covers views on performance of the financial system during the COVID-19-related disruption and the resulting outlook for UK financial stability.

    Announcements on climate change work

    The Prudential Regulation Committee (PRC) and the Financial Policy Committee (FPC) agreed to postpone the launch of the climate biennial exploratory scenario exercise until at least mid-2021. BoE will continue to work to better understand and mitigate the climate change risks:

    • PRA will issue follow-on guidance on the supervisory statement (SS3/19) on enhancing firms’ approaches to managing the financial risks from climate change. Furthermore, the outputs from the Climate Financial Risk Forum will be published in the Summer.
    • BoE will work with other central banks within the Network for Greening the Financial System, through which guides on key issues like supervision and scenario analysis will shortly be published. 
    • BoE will also assist the government with its preparations for COP26. The "COP26 Private Finance Agenda" was launched to help private finance support the economy's transition to net zero. 
    • BoE will continue to focus on embedding climate disclosure across the financial system, including through its own disclosures.

    Other reprioritizations or relaxations

    • In an earlier supervisory statement on market risk (SS13/13), PRA had set expectations on how the twelve-month period used for SVAR should be calculated and how frequently it should be reassessed. PRA is now confirming that it does not expect firms to update their SVAR twelve-month period during the current period of financial market stress, other than if a firm’s current period no longer represents a significant period of stress for the portfolio of the firm. PRA will permit firms to delay the review of the choice of historical data until December 2020, in line with the EBA guidance.  
    • Due to COVID-19, PRA and FCA suspended transition data reporting at the end of the first quarter and cancelled certain firm meetings, which were to be held in the first quarter. In light of the developments since, PRA and FCA have decided to resume full supervisory engagement on LIBOR from June 01, 2020, including data reporting at the end of the second quarter.
    • PRA decided to pause further work on the Insurance Stress Test, given other pressures on firms and the need to focus on COVID-19 specific stresses. PRA will, therefore, not be publishing the results of last year’s test and will postpone the next Insurance Stress Test to 2022, with a view to seeking feedback from firms on the proposed design during the fourth quarter of 2021. 

     

    Related Links

    Keywords: Europe, UK, Banking, Insurance, Securities, COVID-19, Climate Change Risk, Financial Stability Report, LIBOR, Deadline Extension, ESG, Stress Testing, Value-at-Risk, CRR, Reporting, Market Risk, BoE, PRA

    Featured Experts
    Related Articles

    PRA Publishes Q&A on Property Valuation Requirements Under CRR

    PRA published a set of questions and answers (Q&A) covering common queries regarding residential and commercial property valuations, for the purpose of the Capital Requirements Regulation (CRR), during the period of disruption caused by COVID-19 pandemic.

    May 29, 2020 WebPage Regulatory News
    News

    IOSCO Consults on Outsourcing Principles for Operational Resilience

    IOSCO proposed updates to its principles for regulated entities that outsource tasks to service providers.

    May 28, 2020 WebPage Regulatory News
    News

    MAS Consortium to Develop AI Fairness Metrics for Credit Scoring

    MAS announced that the first phase of the Veritas initiative will commence with the development of fairness metrics in credit risk scoring and customer marketing.

    May 28, 2020 WebPage Regulatory News

    BoE Updates Definitions for BTL Data Collection

    BoE published the Statistical Notice 2020/4 to update the buy-to-let (BTL) Phase 2 and Phase 3 definitions for the Interest Rate Type data item.

    May 28, 2020 WebPage Regulatory News
    News

    FSI Examines Financial Stability Implications of Payment Deferrals

    FSI published a brief note that examines challenges facing the banking sector as a result of the payment deferral programs put in place to support borrowers affected by the COVID-19 pandemic.

    May 28, 2020 WebPage Regulatory News
    News

    PRA Finalizes Policy on Prudent Person Principle Under Solvency II

    PRA published the policy statement PS14/20, which contains the supervisory statement SS1/20 and the feedback to responses to the consultation paper CP22/19 on expectations for investment by firms in accordance with the Prudent Person Principle, or PPP, as set out in the Investments Part of the PRA Rulebook.

    May 27, 2020 WebPage Regulatory News
    News

    EBA on Extending Large Exposure Limits for French Systemic Banks

    EBA published an opinion following the notification by the French macro-prudential authority, the Haut Conseil de Stabilité Financière (HCSF), of its intention to extend a measure introduced in 2018 on the use of Article 458(9) of the Capital Requirements Regulation (CRR).

    May 27, 2020 WebPage Regulatory News
    News

    ECB Highlights NPL Resolution as Key Policy Issue in Post-COVID Europe

    As part of a Research Bulletin on the recent policy-relevant work, ECB published an article that examines the lessons learned from past crises for nonperforming loan resolution in the post COVID-19 period.

    May 27, 2020 WebPage Regulatory News
    News

    RBNZ Publishes Financial Stability Report for May 2020

    RBNZ published the financial stability report for May 2020. This review of the financial system in the country highlights that the economic disruption associated with COVID-19 will present challenges to the financial system.

    May 27, 2020 WebPage Regulatory News
    News

    ECB Updates Guidance on Reporting of Securities Holdings Statistics

    ECB updated the guidance notes for reporting related to the statistics on holdings of securities by reporting banking groups (SHSG).

    May 26, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5231