PRA Regulatory Digest - February 2021

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 March 2021

Top news and publications

  • Letter from Sam Woods – Feedback: Operational readiness for a zero or negative Bank Rate
  • CP5/21 ‘Implementation of Basel standards’

News and speeches

Goldilocks and the three pillars: how much capital is just right? – speech by Anna Sweeney

10 February 2021

Anna Sweeney says regulators must strike the right balance when they decide how much capital insurers need to hold. The three pillars she refers to are the different ways we regulate insurers.

Regulatory measures for PRA firms in response to coronavirus

PRA statement on supervisory benchmarking exercise relating to capital internal models

9 February 2021

This PRA statement addresses the 2021 supervisory benchmarking exercise for capital internal models, relevant to credit institutions in scope of the reporting requirements.

PRA statement on Covid-19 regulatory reporting amendments

5 February 2021

The PRA published a statement providing further guidance on submitting this year’s annual submissions and other types of regulatory reporting, following the previous statement published on Friday 26 June 2020 ‘Statement by the PRA on Covid-19 regulatory reporting and disclosure amendments’.

Cross cutting publications and updates

Letter from the PRA and FCA ‘Transforming data collection – an update on progress and plans for 2021’

23 February 2021

The PRA and FCA published a joint letter to chief executive officers, providing an update on the work being done to collect data, and asking firms to work with them in partnership to tackle growing challenges.

Virtual meetings with the PRA’s Senior Advisors

16 February 2021

The PRA sent a letter to Non-Executive Directors who participated in the PRA pilot programme of virtual meetings with PRA Senior Advisors, which took place in 2020.

Letter from Sam Woods – Feedback: Operational readiness for a zero or negative Bank Rate

4 February 2021

The PRA sent a letter to chief executive officers about firms’ operational readiness to implement a zero or negative Bank Rate. This letter is not indicative that the Monetary Policy Committee will employ a zero negative policy rate.

Further information

Banking publications and updates

PRA statement on EBA Guidelines and EU Regulatory Technical Standards relating to approaches to credit risk following the end of the transition period

25 February 2021

This statement provides clarity on the PRA’s approach to published European Banking Authority Guidelines and EU Regulatory Technical Standards relating to the Standardised and Internal Ratings Based approaches to credit risk following the end of the transition period.

PRA statement on the definition of ‘higher paid material risk taker’

25 February 2021

The PRA has identified that there is an error in the ‘higher paid material risk taker’ definition in Rule 1.3 in the Remuneration Part of the PRA Rulebook, introduced as part of the PRA’s implementation of Capital Requirements Directive V.

Letter from Victoria Saporta ‘Disclosures about IFRS 9 expected credit losses accounting’

16 February 2021

Letter from Victoria Saporta to chief financial officers requesting an update on progress towards the recommendations of the Taskforce on Disclosure about Expected Credit Losses.

CP5/21 ‘Implementation of Basel standards’

12 February 2021

This Consultation Paper (CP) sets out the PRA’s proposed rules in respect of the implementation of international standards through a new PRA Capital Requirements Regulation (CRR) rule instrument.

The purpose of these rules is to implement part of the set of international standards that remain to be implemented in the UK. This CP also sets out the proposed new PRA CRR rules in full, including parts of the onshored CRR that are not changing but rather are being transferred into PRA rules (although, where these do not change, they do not form part of this consultation).

This consultation is relevant to banks, building societies, PRA-designated investment firms, and PRA-approved or -designated financial or mixed financial holding companies (firms).

Further information

Insurance publications and updates

Letter from Sid Malik on Feedback on the application of the Effective Value Test

1 February 2021

The PRA sent a letter to Chief Actuaries of PRA-regulated insurance firms, regarding feedback on the application of the Effective Value Test.

Further information

Your input and views on open PRA consultations and other requests closing in March 2021

Closing date: 31 March

Also in the month

24 February 2021

19 February 2021

10 February 2021

5 February 2021

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. In January Bank Overground published 'How could the recent increase in homeworking affect the economy?' and 'What types of businesses have used government-guaranteed loan schemes?'

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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