• UK Prudential Regulation Authority Publishes New Policies on Setting Pillar 2 Capital Requirements

  07/29/2015
  The Prudential Regulation Authority published: (i) a Policy Statement on assessing capital adequacy under Pillar 2; (ii) a Statement of Policy on the PRA’s methodologies for setting Pillar 2 capital; (iii) a Supervisory Statement on Pillar 2 reporting; and (iv) a Supervisory Statement on the Internal Capital Adequacy Assessment Process that must be undertaken by firms and the Supervisory Review and Evaluation Process conducted by the PRA. The documents are applicable to banks, building societies and PRA-designated firms. Pillar 2 aims to ensure that firms have sufficient capital to cover potential risks not sufficiently addressed in the prescriptive Pillar 1 requirements. The Pillar 2 framework enters into force on January 1, 2016. The PRA's Policy Statement on assessing capital adequacy under Pillar 2 contains feedback received on its consultation paper of January 2015 on proposals to enhance transparency and accountability in setting Pillar 2 capital requirements. The Policy Statement explains that firms must carry out an ICAAP in accordance with the PRA's rules and it is not sufficient to only replicate the PRA's methodologies as the ICAAP is the responsibility of a firm's management body.
  
  View the Policy Statement.
  
  View the Statement of Policy.
  
  View the Supervisory Statement on Pillar 2 reporting.
  
  View the Supervisory Statement on the ICAAP and SREP.
  TOPIC: Bank Prudential Regulation & Regulatory Capital
  

LINKS & DOWNLOADS

• View the Policy Statement.
  
• View the Statement of Policy.
  
• View the Supervisory Statement on Pillar 2 reporting.
  
• View the Supervisory Statement on the ICAAP and SREP.