Featured Product

    PRA Consults on Approach to Supervising Liquidity and Funding Risks

    October 17, 2019

    In consultation paper (CP27/19), PRA published a proposal (CP27/19) to update the supervisory statement SS24/15 on the PRA approach to supervising liquidity and funding risk. The updated SS24/15 will reflect relevant updates to the Market Operations Guide of BoE and to reiterate the relevant expectations set out in SS9/17 on recovery planning. The consultation closes on November 17, 2019, with PRA proposing to apply the draft amendments to SS24/15 from the date of final publication.

    The updates to SS24/15 propose that there should be no presumptive order in which firms should use the BoE liquidity facilities, including the Discount Window Facility, or draw down their own liquid asset buffers to meet a liquidity need. Firms would be expected to use their own judgment in applying for and using the BoE liquidity facilities. The proposals align the view of the appropriate usage of BoE facilities in SS24/15 with the Market Operations Guide. The proposed updates to SS24/15 would also reiterate that where firms view central bank liquidity facilities, including at BoE, as part of the their liquidity risk management strategy, PRA would expect this to be included as part of the credible recovery options outlined in the firms’ recovery plans.

    BoE also published its Market Operations Guide, which outlines the BoE framework for its operations in sterling money markets and updates the Sterling Market Framework (formally known as the Red Book). The Market Operations Guide reiterates that there is a presumption that banks and building societies that meet the PRA Threshold Conditions for authorization may sign up to the Sterling Market Framework and gain access to borrowing under the Sterling Market Framework against eligible collateral. It also notes that BoE does not consider that there is a presumptive order of usage between the Sterling Market Framework and a firm’s liquid asset buffers. CP27/19 proposes to update SS24/15 so that it aligns with the updated Sterling Market Framework as set out in the Market Operations Guide. CP27/19 is relevant to PRA-authorized UK banks, building societies, and PRA-designated UK investment firms, referred to collectively as firms. The proposals have been designed in the context of the current UK and EU regulatory framework. PRA has assessed that the proposals will not be affected in the event that UK leaves EU with no implementation period in place.

     

    Related Links

    Comment Due Date: November 17, 2019

    Effective Date: Publication Date of Final Policy (Proposed)

    Keywords: Europe, UK, Banking, Liquidity Risk, Market Operations Gide, Recovery Planning, CP 27/19, SS 24/15, PRA, BoE

    Featured Experts
    Related Articles
    News

    HKMA Publishes Hong Kong Taxonomy for Sustainable Finance

    The Hong Kong Monetary Authority (HKMA) published the Hong Kong Taxonomy for Sustainable Finance.

    May 21, 2024 WebPage Regulatory News
    News

    EU Taking Steps to Set Out and Enforce AI Regulations

    Many believe that the transformative power of generative artificial intelligence (GenAI) has potential to reshape the financial sector in the time to come.

    May 21, 2024 WebPage Regulatory News
    News

    ISSB Releases Digital Sustainability Disclosures Taxonomy

    The themes of the harmonization and interoperability of sustainability disclosure standards among various jurisdictions remain at the top-of-mind for international standard-setting bodies.

    May 21, 2024 WebPage Regulatory News
    News

    BCBS Report Studies Implications of Digitalization of Finance

    The Basel Committee on Banking Supervision (BCBS) published a report that examines the implications of the digitalization of finance for banks and supervisors.

    May 21, 2024 WebPage Regulatory News
    News

    BCBS Consults on Guidelines for Counterparty Credit Risk Management

    The Basel Committee on Banking Supervision (BCBS) is seeking comments, until August 28, 2024, on guidelines for counterparty credit risk management of banks.

    May 21, 2024 WebPage Regulatory News
    News

    BIS Paper Outlines Vision for Future Financial System

    In a recent paper, the General Manager of Bank for International Settlements (BIS) and the Indian entrepreneur (Infosys co-founder) Nandan Nilekani have laid out a vision for the Finternet, which is proposed to be a network of multiple financial ecosystems, much like the internet.

    April 29, 2024 WebPage Regulatory News
    News

    NGFS Outlines Options for Supervisory Review of Transition Plans

    The Network for Greening the Financial System (NGFS) recently published three reports on the use of transition plans to boost sustainable finance and manage climate-related financial risks.

    April 29, 2024 WebPage Regulatory News
    News

    BCBS Issues Discussion Paper on Climate Scenario Analysis

    The Basel Committee on Banking Supervision (BCBS) issued a discussion paper on the use of climate scenario analysis to strengthen the management and supervision of climate-related financial risks.

    April 29, 2024 WebPage Regulatory News
    News

    OSFI Issues Phase2 Consultation on Climate Scenario Exercise for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) recently announced a consultation on the second phase of the Standardized Climate Scenario Exercise (SCSE) for banks and other financial institutions it regulates in Canada.

    April 25, 2024 WebPage Regulatory News
    News

    CFIT to Chair Open Finance Taskforce Announced by UK Government

    The UK government announced the formation of an industry-led Open Finance Taskforce, chaired by the Center for Finance, Innovation, and Technology (CFIT).

    April 25, 2024 WebPage Regulatory News
    RESULTS 1 - 10 OF 8967