Community
In this consultation the Prudential Regulation Authority (PRA) sets out the proposed changes to its rules to implement CRD IV. Proposed supervisory statements are made giving more information on the PRA’s approach to certain CRD IV provisions. All banks, building societies and PRA designated investment firms are affected by these proposals. The Capital Requirements Regulation (CRR) is directly binding on firms subject to permitted competent authority discretions and the Capital Requirements Directive (CRD) must be transposed into the PRA Handbook.
The consultation seeks views on:
The PRA’s consultation paper sets out the detail of these changes and the transitional periods for firms to allow them to prepare for the new regime. The approach to the reporting requirements are set out at page 40.
The PRA is also making enhancements to the quality of capital held against “Pillar 2” which encompasses firms’ internal capital assessment and the supervisory review of those assessments. Pillar 2 is intended to ensure that firms have adequate capital to support all the relevant risks in their business and is divided into capital held against risks not captured or not fully captured by the regulations (Pillar 2A) and risks to which a firm may become exposed over a forward-looking planning horizon (Pillar 2B). In addition to the Pillar 1 requirements, the PRA regards Pillar 2A capital as the minimum level of capital firms should have.
Feedback is requested by 2 October. The PRA will then publish a policy statement with feedback, finalised rules and final supervisory statements in December 2013.
Related Link:
http://www.bankofengland.co.uk/publications/Pages/news/2013/097.aspx
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