Non-systemic UK banks: The Prudential Regulation Authority’s approach to new and growing banks

Consultation Paper 9/20
Published on 22 July 2020

Overview

In this consultation paper (CP), the Prudential Regulation Authority (PRA) sets out its proposed approach to supervising new and growing, non-systemic UK banks (collectively referred to as ‘banks’). All the proposals are clarifications of the PRA’s current supervisory approach with the exception of: (i) proposed changes to the calculation of the PRA buffer for new banks; and (ii) setting expectations in relation to solvent wind down plans.

The proposals in this CP would:

  • create a new supervisory statement (SS): ‘Non-systemic UK Banks: The Prudential Regulation Authority’s approach to new and growing banks’ (Appendix 1); 
  • reference to the new SS in paragraph 5.25 of Pillar 2 capital policy in SS31/15 ‘The Internal Capital Adequacy Assessment Process (ICAAP) and the Supervisory Review and Evaluation Process (SREP)’ (Appendix 2); and
  • reference the new SS in paragraph 9.45 of the Statement of Policy (SoP) ‘The PRA’s methodologies for setting Pillar 2 capital’ (Appendix 3).

This CP is primarily relevant to new and growing non-systemic UK Banks, though not all, as some firms in this category will have sufficient experience and resources to be able to move quickly to the standard expected of most established banks.

Implementation

The PRA proposes that the amendments set out in this CP would take effect in the first half of 2021.

Responses and next steps

This consultation closes on Wednesday 14 October 2020. The PRA invites feedback on the proposals set out in this consultation. Please address any comments or enquiries to CP09_20@bankofengland.co.uk.

PDFConsultation paper 9/20

Consultation ends: 14 October 2020
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