Background
From its commencement on 1 April 2013, the Prudential Regulation Authority (PRA) has adopted a number of legacy Financial Services Authority (FSA) policy publications relevant to the advancement of its objectives. This document, initially issued by the FSA as Good practices for settlement bank management of potential risk exposures to customer banks FG 11/02, has been adopted by the PRA as a Supervisory Statement as part of this process. The PRA may choose to review this legacy publication at a later stage.
Legacy Supervisory Statement 12/13
Summary of the key issues
Firms should ensure that they take account of the credit, liquidity and operational risks arising from acting as a settlement bank for a second tier bank