Community
The Prudential Regulation Authority (PRA) intends to require banks to deduct from Common Equity Tier 1 significant investments in insurance companies above threshold allowances under its implementation of CRD IV/CRR. This will apply both to banking groups with an investment in an insurance company and to solo banks with an investment in an insurance company. The rationale for this approach is that deduction of significant investments is necessary to prevent the multiple use of the same capital resources in different parts of the financial system. The deduction of significant investments made by a bank in an insurer helps to ensure that both regulated entities are properly capitalised and limits the risk of contagion.
Related Link:
http://www.bankofengland.co.uk/publications/Documents/news/2013/praannex.pdf
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
Ritesh Jain Founder at Infynit / Former COO HSBC
29 January
Carlo R.W. De Meijer Owner and Economist at MIFSA
27 January
Bekhzod Botirov CEO & Co-founder at Upay
24 January
Welcome to Finextra. We use cookies to help us to deliver our services. You may change your preferences at our Cookie Centre.
Please read our Privacy Policy.