This Supervisory Statement (‘SS’) is relevant to the UK banks and building societies to which the rules in the Resolution Assessment Part of the PRA Rulebook (‘the Rules’) apply (‘a firm’).
It sets out the Prudential Regulation Authority’s (PRA’s) expectations on how these firms should comply with the rules.
This SS should be read in conjunction with the Resolution Assessment Part of the PRA Rulebook and the Bank of England’s (‘the Bank’) Statement of Policy, ‘The Bank of England’s Approach to Assessing Resolvability’ (‘the Bank’s Approach to Assessing Resolvability SoP’). The Rules require firms to assess their preparations for resolution, submit a report of their assessment, and publish a summary of their report. The Bank’s Approach to Assessing Resolvability SoP sets out, amongst other things, the Bank’s approach to assessing the resolvability of banks and building societies where the Bank, as resolution authority, has notified them that their resolution strategy is bail-in or partial-transfer or where the Bank, in its capacity as host resolution authority, has notified them that they are a ‘material subsidiary’ of an overseas-based banking group for the purposes of setting internal MREL in the UK.
The PRA may, in consultation with the Bank as resolution authority, consider an exercise of its powers under section 55M of the Financial Services and Markets Act 2000 (FSMA) to apply some or all of the requirements set out in the Resolution Assessment Part of the PRA Rulebook to one or more banks or building societies with a preferred resolution strategy of Bank-led bail-in or partial-transfer resolution strategy , where it is desirable to do so to advance the PRA’s general objective to promote the safety and soundness of the firms it regulates. The PRA would consult with the affected bank or building society on a case by case basis before reaching a decision.