UK Rules to Implement France's Large Exposure Limit for Highly Indebted Corporates

The U.K. Prudential Regulation Authority has published a Policy Statement and final rules to reciprocate the French measure on large exposures, following a recommendation by the European Systemic Risk Board. In July 2018, France's Haut Conseil de stabilité financière (HCSF) imposed a measure under the Capital Requirements Regulation that lowers the large exposure limit, from 25% to 5% of a firm's eligible capital, for French G-SIIs and French O-SIIs for their exposures to French non-financial counterparties that are 'highly indebted'. The PRA will apply the same 5% large exposure limit for exposures to certain French NFCs through amendments to the Large Exposures part of the PRA Rulebook. The measures apply on a consolidated basis to U.K. firms identified by the PRA as Global Systemically Important Institutions and Other Systemically Important Institutions from January 1, 2020.

View the PRA rules.

View the PRA Policy Statement.

Return to main website.