On 7 May:
- PRA announced details of its plans to support firms and enable them and the PRA to focus on the highest priority work:
- The Climate Biennial Exploratory Scenario is postponed until at least mid-2021;
- full supervisory engagement on LIBOR will resume from 1 June 2020, including data reporting at the end of Q2;
- PRA is pausing work on the insurance stress test 2019; and
- PRA will not expect firms to update their Stressed VAR 12-month period at the moment;
- BoE and PRA have agreed changes to resolution measures, postponing the date for banks and building societies to submit their first reports on preparations for resolution and publicly disclose a summary of them to October 2021 and June 2022 respectively. Firms also now have until 1 April 2021 to comply with the provisions on valuation capabilities to support resolvability and will not have to submit certain resolution pack information until the end of 2022. MRELs will reflect PRA’s policy changes to Pillar 2A capital setting and banks will have more time to meet higher MRELs;
- PRA has decided to set all Pillar 2A capital requirements at a nominal amount instead of as a percentage of RWAs. This will apply for the 2020 and 2021 SREP process. Firms with a SREP in 2020 need not apply for any variation, but those that do not can apply for a conversion of their current Pillar 2A requirement into a nominal amount;
- BoE published its monetary policy report and interim financial stability report, looking at a scenario for the path of the UK economy in the light of Covid-19. The reports describe the measures put in place so far, and notes that banks have shown they are strong enough to continue lending during the severe economic disruption. It believes the economy will recover, and describes the quantitative easing measures it is using to inject more funds into the UK economy and
- FCA has written to FOS asking for its reassurance that it will consider complaints about conduct during the pandemic in the light of the conditions and guidance that applied at the time, and not with hindsight. FOS confirmed it considers its framework is appropriate and reminded FCA of the importance of clear articulation of policy changes.