PRA Tightens Limit for Large Exposures to Certain French NFCs
PRA published a policy statement (PS24/19) that sets out the final rule on amendments to the Large Exposures Part of the PRA Rulebook (Appendix). The final PS24/19 follows a consultation (CP15/19) that proposed to tighten the large exposure limit to 5% of eligible capital in respect of the exposures of UK global systemically important institutions (G-SIIs) and other systemically important institutions (O-SIIs) to French non-financial corporations (NFCs). This amendment has been made pursuant to Article 395(1) of the Capital Requirements Regulation (CRR). This reciprocates the measure imposed by the Haut Conseil de stabilité financière (HCSF) in France in July 2018. PS24/19 will take effect on January 01, 2020.
Although PRA received no responses to the consultation, it has made one minor change to the draft rule-making instrument (Rule 5.1) to remove possible ambiguity about the scope of application. PRA considers that this will have no impact on firms and, specifically, mutuals. The measure described in PS24/19 applies on a consolidated basis to the firms identified by PRA as G-SIIs and O-SIIs, under the Capital Requirements Directive (CRD) as implemented in the Capital Requirements (Capital Buffers and Macro-prudential measures) Regulations 2014. PS24/19 is, therefore, relevant to such firms and their subsidiaries.
The policy set out in this PS24/19 has been designed in the context of the current UK and EU regulatory framework. PRA will keep the policy under review to assess whether any changes would be required due to changes in the UK regulatory framework, including those arising once any new arrangements with EU take effect. In the event that UK leaves EU with no implementation period in place, PRA has assessed that the rule attached to PS24/19 would need to be amended under the EU (Withdrawal) Act 2018. Post the withdrawal of UK from EU, PS24/19 should be read in conjunction with the supervisory statement SS2/19 on PRA approach to interpreting reporting and disclosure requirements and regulatory transaction forms.
Related Links
Effective Date: January 01, 2020
Keywords: Europe, UK, France, Banking, Large Exposures, CRR, CRD, PRA Rulebook, HCSF Measure, G-SII, O-SII, PS24/19, CP15/19, Concentration Risk, 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
OSFI Examines Impact of Revised Guideline on Mortgage UnderwritingRelated Articles
EBA Finalizes Templates for One-Off Climate Risk Scenario Analysis
The European Banking Authority (EBA) has published the final templates, and the associated guidance, for collecting climate-related data for the one-off Fit-for-55 climate risk scenario analysis.
EBA Mulls Inclusion of Environmental & Social Risks to Pillar 1 Rules
The European Banking Authority (EBA) recently published a report that recommends enhancements to the Pillar 1 framework, under the prudential rules, to capture environmental and social risks.
BCBS Consults on Disclosure of Crypto-Asset Exposures of Banks
As a follow on from its prudential standard on the treatment of crypto-asset exposures, the Basel Committee on Banking Supervision (BCBS) proposed disclosure requirements for crypto-asset exposures of banks.
BCBS and EBA Publish Results of Basel III Monitoring Exercise
The Basel Committee on Banking Supervision (BCBS) and the European Banking Authority (EBA) have published results of the Basel III monitoring exercise.
PRA Updates Timeline for Final Basel III Rules, Issues Other Updates
The Prudential Regulation Authority (PRA) recently issued a few regulatory updates for banks, with the updated Basel implementation timelines being the key among them.
US Treasury Sets Out Principles for Net-Zero Financing
The U.S. Department of the Treasury has recently set out the principles for net-zero financing and investment.
EC Launches Survey on G7 Principles on Generative AI
The European Commission (EC) launched a stakeholder survey on the draft International Guiding Principles for organizations developing advanced artificial intelligence (AI) systems.
ISSB Sustainability Standards Expected to Become Global Baseline
The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.
IOSCO, BIS, and FSB to Intensify Focus on Decentralized Finance
Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.
BCBS Assesses NSFR and Large Exposures Rules in US
The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.