PRA Regulatory Digest - August 2020

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 01 September 2020

Top news and publications

  • Update to the temporary approach to VAR back-testing exceptions to mitigate the possibility of excessively pro-cyclical market risk capital requirements
  • PS19/20 ‘Financial Services Compensation Scheme – Temporary High Balance Coverage Extension’

Regulatory measures for firms in response to Covid-19

‘Update to the temporary approach to VAR back-testing exceptions to mitigate the possibility of excessively pro-cyclical market risk capital requirements’

27 August 2020

The PRA published ‘Update to the temporary approach to VAR back-testing exceptions to mitigate the possibility of excessively pro-cyclical market risk capital requirements’ following its previous ‘Statement on VAR back-testing exceptions temporary approach’, which was published on Monday 30 March 2020.

PRA statement on Covid-19: IFRS 9 and capital requirements – Further guidance as Covid-19 specific payment deferrals come to an end

26 August 2020

The PRA published a ‘Statement on Covid-19: IFRS 9 and capital requirements – Further guidance as Covid-19 specific payment deferrals come to an end’ clarifying the PRA’s approach to IFRS 9 and capital requirements in response to update FCA guidance on retail mortgage payment deferrals.

Banking publications and updates

Letter from Mel Beaman ‘Building societies sourcebook – fixed rate lending guidelines’

11 August 2020

In response to a request from the Building Societies Association, the PRA published a letter from Mel Beaman, Director for UK Deposit Takers: ‘Building societies sourcebook – fixed rate lending guidelines’.

PS19/20 ‘Financial Services Compensation Scheme – Temporary High Balance Coverage Extension’

4 August 2020

This PRA Policy Statement (PS) provides feedback to responses to Consultation Paper (CP) 6/20 ‘Financial Services Compensation Scheme – Temporary High Balances Coverage Extension’. It also includes final policy in the form of amendments to:

This PS is relevant to retail financial consumers who are currently, or who may become, Temporary High Balance (THB) depositors. This PS is also relevant to the Financial Services Compensation Scheme (FSCS) and to all PRA-authorised deposit takers.

Your input and views on open PRA consultations and other requests closing in September 2020

14 September 2020

30 September 2020

30 September 2020

More information

Bank Underground - 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. Last month Bank Overground published ‘How does the Prudential Regulation Authority check that insurance firms are ensuring their models continue to produce appropriate capital requirements?’

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.

European and international developments - readers are also referred to the following websites:

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