PRA Regulatory Digest - May 2019

The PRA Regulatory Digest is for people working in the UK financial services industry and highlights key regulatory news and publications delivered for the month.
Published on 03 June 2019

Top news and publications

News and speeches

‘Scanning the horizon’ – speech by Sam Woods

24 May 2019

In his speech, Sam Woods says we must keep ‘scanning the horizon’ to identify problems in the financial system. There could be other financial crashes, so it’s vital to remain vigilant.

He gives examples of issues the PRA looks for. And he warns that, unless we keep questioning firms and ourselves about worrying developments in the markets, the work we have done to make the financial system safer could be reversed.

‘Stylish regulation’ – speech by Sam Woods

16 May 2019

In his speech, Sam Woods discusses what our system of financial regulation might look like after the UK leaves the EU.

Sam talks about the ‘style’ of regulation we should aim for and explores the differences between EU and UK approaches to implementing regulatory rules.

Statement on Metro Bank

17 May 2019

The PRA welcomes the steps taken on Friday 17 May 2019 by Metro Bank. Metro Bank is profitable and continues to have adequate capital and liquidity to serve its current customer base. It has raised additional capital in order to fund future growth.

‘Model use and misuse’ – speech by David Rule

14 May 2019

In this speech, David Rule, Executive Director of Insurance Supervision, discusses insurance models and the growing importance of model risk management. He describes some recent findings from the PRA’s work to guard against weakening over time of capital requirements calculated from internal models – so-called ‘model drift’.
 

‘Operational resilience – a progress report’ – speech by Nick Strange

14 May 2019

In his speech, Nick Strange, Director, Supervisory Risk Specialists, looks at one of the Bank of England’s strategic priorities – improving the operational resilience of the UK financial sector. Operational resilience is the ability to prevent, respond and recover from operational disruptions.

Banking publications and updates

PRA110

31 May 2019

On 1 June 2019 there will be one month to go until the implementation of PRA110 on Monday 1 July 2019 and the dual reporting period with FSA047 and FSA048. Firms are advised to continue to familiarise themselves with the policy, template and instructions. For the full update see the ‘Reporting of PRA110’ section.

As part of the PRA’s work on the Pillar 2 liquidity framework, including the introduction of PRA110 reporting by firms from Monday 1 July 2019, the PRA has published Version 1 of the PRA110 liquidity metric monitor tool (PRA110 LMM tool). It is published to assist firms in the same way as the LMM for FSA047 and FSA048. It is for information only and must not be used to submit regulatory returns required by our rules. The PRA110 LMM tool may be updated after the publication of the final policy following Consultation Paper 6/19 ‘Pillar 2 liquidity: Updates to the framework’ if required, to align with an updated PRA110 reporting template.

Systemic Risk Buffer rates for ring-fenced banks and large building societies

1 May 2019

The PRA is required by the Capital Requirements (Capital Buffers and Macro-prudential Measures) Regulations 2014 as amended by Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) Regulations 2015 (Part 5A) to set Systemic Risk Buffer (SRB) rates for ring-fenced banks (RFBs) and large building societies from Wednesday 1 January 2019 by applying the Financial Policy Committee (FPC)’s framework for the SRB. The PRA has set out its approach to the implementation of the SRB in the Statement of Policy 'The PRA’s approach to the implementation of the systemic risk buffer' (December 2018).

 

Insurance publications and updates

A framework for assessing financial impacts of physical climate change: a practitioner’s aide for the general insurance sector

22 May 2019

With a foreword from David Rule (Executive Director of Insurance Supervision and sponsor of the working group), one-page executive summary, and short introduction, this report has been written by a cross-industry working group to outline a framework for practitioners in the general insurance sector to use to assess the financial impacts of physical climate change.

The working group is keen to get comments and views on the framework. Responses are requested by Friday 22 November 2019.

CP11/19 ‘Solvency II: Maintenance of the transitional measure on technical provisions’

22 May 2019

This consultation paper (CP) sets out the PRA proposals to update Supervisory Statement SS6/16 ‘Maintenance of the ‘transitional measure on technical provisions’ under Solvency II’.

The CP is relevant to UK insurance and reinsurance firms within the scope of Solvency II that have been granted approval to use the transitional measure on technical provisions; the Society of Lloyds; and firms that are considering applying to use this transitional measure.

This consultation closes on Wednesday 21 August 2019.

PRA open consultations - closing June 2019

Bank Underground

Bank Underground is a blog for Bank of England staff to share views that challenge – or support – prevailing policy orthodoxies. The views expressed here are those of the authors, and are not necessarily those of the Bank of England or its policy committees.

Bank Overground

The purpose of Bank Overground is to share our internal analysis. Each bite-sized post summarises a piece of analysis that supported a policy or operational decision.

KnowledgeBank

From interest rates and inflation through to bank failures and financial crises, KnowledgeBank uses everyday examples and engaging visuals to bring economics to life.

Stay in touch

Subscribe to our email notifications for all the latest news and publications.

Send your comments on the PRA Regulatory Digest to PRA Communications.

For regular updates follow us on Twitter.

Find all PRA Regulatory Digests here.

This page was last updated 31 May 2019
Was this page useful?
Add your details...