Shearman & Sterling LLP | FinReg | Bank of England Announces COVID-19 Changes to Resolution Measures
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  • Bank of England Announces COVID-19 Changes to Resolution Measures
    The Bank of England and U.K. Prudential Regulation Authority have issued a statement on changes to the resolution measures applicable to the major U.K. banks and building societies, designed to ease the operational burden on firms in the wake of COVID-19.

    The dates by which firms must submit their first reports describing their preparations for resolution, and publish summaries of those reports, under the BoE and PRA’s new Resolvability Assessment Framework have been extended by one year. The first reports should be submitted to the PRA by October 2021 and public disclosures should be made by June 2022. The new Resolvability Assessment Framework was finalized by the BoE and PRA in July 2019. It comprises: (i) the BoE’s approach to assessing resolvability; (ii) the PRA’s new rule requiring firms to assess their resolvability and to submit a report to the PRA on the assessment and publish a summary statement on the assessment; and (iii) the BoE’s public statements on the resolvability of the individual firms that are in scope of the PRA’s new rules. In due course, the PRA will also consult on changes to its Resolution Assessment Rules, which apply to Barclays, HSBC, Lloyds Banking Group, Nationwide, The Royal Bank of Scotland, Santander UK, Standard Chartered and Virgin Money UK.

    Other changes to resolution planning mean that:
    • The compliance deadline for the BoE’s Statement of Policy on valuation capabilities to support resolvability has been extended by three months to April 1, 2021;
    • The deadline for firms to submit certain resolution pack information under the PRA Supervisory Statement has been extended to the end of 2022; and
    • The 2021 minimum requirement for own funds and eligible liabilities will reflect the changes the BoE has made to Pillar 2A requirements. The BoE will keep MRELs under review and will monitor market developments to determine January 2021 MRELs and indicative January 2022 MRELs.

    View the BoE and PRA's statement on changes to banks' resolution regimes.

    View details of the BoE and PRA's Resolvability Assessment Framework.

    View details of the BoE’s changes to Pillar 2A requirements.

    Details of other regulatory responses to COVID-19 are available at our COVID-19 Research Center.

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