PRA

Recent Articles

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    30/01/2024

    PRA's review of ring-fencing rules: potential for relaxation in key pain points

    On 25 January 2024, the Prudential Regulation Authority (PRA) published a report setting out its conclusions following the PRA’s review of its ring-fencing rules undertaken during the course of 2023. This marks the first review carried out by the PRA since the ring-fencing regime became effective on 1 January 2019, delivering on its statutory duty to review its ring-fencing rules every five years from the regime’s inception.  The PRA review only covered the ring-fencing regime in so far as it is contained in the rules and associated guidance within the PRA Rulebook and any supplementary...
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    11/07/2023

    Reducing bank failures? PRA consults on how to ensure a solvent exit for non-systemic banks and building societies

    On 28 June 2023, the Prudential Regulation Authority (“PRA”) published a consultation paper (“CP 10/23”) which outlines proposals for non-systemic banks and building societies in the UK to be required to prepare for a solvent exit as part of their business-as-usual (“BAU”) activities and, if solvent exit becomes a reasonable prospect, to be able to execute one with a more detailed plan in place.The focus is to ensure that solvent exits are completed successfully, which in turn will help support an orderly, timely, and ultimately solvent, exit from PRA-regulated...
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    04/07/2023

    Basel 3.1: How calculating risk is changing for banks

    The Prudential Regulation Authority (PRA) recently consulted on how it plans to implement the Basel 3.1 standards in the UK. The Basel 3.1 standards are the remaining parts of the Basel III standards that were to be implemented in the UK, which aim to strengthen the regulation, supervision and risk management of banks. The PRA’s proposals in its Consultation Paper 16/22 (Consultation Paper) will closely align the UK with international standards by making significant changes to the way firms calculate risk weighted assets (RWA). This will alter, amongst other things, the way in which banks...
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    07/02/2023

    Insurer Resolution Regime will be time- and re­source-in­tens­ive for firms in scope

    HM Treasury is proposing to introduce an Insurer Resolution Regime (IRR). The regime will provide the Bank of England (BoE) with tools to manage the failure of insurance companies. The aim of the proposed regime, which will draw on aspects of the well-established bank regime, is to allow UK authorities to act quickly to stabilise a failing insurer and to minimise risks to policyholders, financial stability, the wider financial sector and the taxpayer.The Prudential Regulation Authority (PRA) already has rules which are aimed at preventing insurer failure, and plans to develop these further. This...
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    24/11/2022

    Unlocking the potential of Solvency II?

    According to the HMT Response, the majority of its proposals were supported by the evidence collected as part of the consultation process[3], namely the proposals to: change the calculation of the risk margin to reduce it by 60-70% for long-term life insurers (measured in the context of recent economic conditions); adjust the approach to determining the fundamental spread component of the matching adjustment; widen the range of assets permissible in matching adjustment portfolios; and reform reporting and administrative requirements to reduce EU-derived burdens. Fundamental Spread Unsurprisingly,...
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    06/04/2020

    Senior Managers and Certification Regime (SMCR) expectations during the Coronavirus crisis

    Joint FCA and PRA statement Senior Managers and Certification Regime (SM&CR) and coronavirus (Covid-19): our expectations of dual-regulated firms Senior Managers and Certification Regime (SM&CR) and coronavirus (Covid-19): our expectations for solo-regulated firms Whilst the SMCR may not be at the forefront of most firms’ minds right now, the coronavirus crisis has already given rise to SMCR compliance issues and practical challenges. The Regulators, recognising this, want to minimise the burden on firms at this time and so the relaxation of certain SMCR formalities in these circumstances...
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