Strengthening Capital Standards: Implementing CRD IV

Published on 19 December 2013

Strengthening capital standards: implementing CRD IV, feedback and final rules - PS7/13

Background

In June 2013 the European Union published legislation to implement within the EU “Basel III”, the international regulatory framework for banks developed by the Basel Committee on Banking Supervision. From 1 January 2014 this will replace the current capital requirements directives with two new legislative instruments: the Capital Requirements Directive (CRD) and the Capital Requirements Regulation (CRR), collectively known as CRD IV.

This policy statement publishes the final statement of policy, rules and supervisory statements required to implement CRD IV in the UK for banks, building societies, and Prudential Regulation Authority (PRA) designated investment firms. The proposals in this Policy Statement do not apply to investment firms supervised by the Financial Conduct Authority (FCA). Such firms should refer to the FCA website Opens in a new window for the applicable rules and guidance.

Policy Statement 7/13 Opens in a new window

Supervisory Statements

• The Internal Capital Adequacy Assessment Process (ICAAP) and the Supervisory Review and Evaluation Process (SREP) - SS5/13
• Stress testing, scenario analysis and capital planning - SS6/13
• CRD IV and capital - SS7/13
• The Basel I floor  - SS8/13
• Credit risk – securitisation - SS9/13
• Credit risk - standardised approach - SS10/13
• Credit risk - internal ratings based (IRB) approaches - SS11/13
• Counterparty credit risk - SS12/13
• Market risk - SS13/13
• Operational risk  - SS14/13
• Groups - SS15/13
• Large Exposures - SS16/13
• Credit risk mitigation - SS17/13
• Third country equivalence aspects of the credit risk provisions in the CRR, and recognised exchanges - SS20/13
• Implementing CRD IV: capital buffers - SS6/14

SS20/13 sets out the PRA’s approach to third country equivalence of certain credit risk provisions, and recognised exchanges, as referred to in paragraphs 7.23 and 7.13 respectively of PS7/13 and in SS10/13, SS11/13 and SS7/13.

Related Consultation Paper

Occasional Consultation Paper 8/13 Opens in a new window

Published on 1 August 2013

Strengthening Capital Standards: Implementing CRD IV - CP5/13

Background

In June 2013 the European Union published legislation to implement within the EU “Basel III”, the international regulatory framework for banks developed by the Basel Committee on Banking Supervision. From 1 January 2014 this will replace the current capital requirements directives with two new legislative instruments: the Capital Requirements Directive (CRD) and the Capital Requirements Regulation (CRR), collectively known as CRD IV. 

In this consultation the Prudential Regulation Authority (PRA) sets out the proposed changes to its rules to implement CRD IV. It also sets out proposed supervisory statements, giving more information on the PRA’s approach to certain CRD IV provisions. Banks, building societies and PRA designated investment firms are affected by these proposals.

Summary of the key issues covered by the consultation paper

The consultation seeks views on:

• how the PRA is planning to operate discretions and derogations provided under the CRR;
• how the PRA is planning to operate the transitional provisions provided under CRD and CRR;
• how the PRA is intending to transpose the obligations in CRD into rules;
• the content of the draft Supervisory Statements;
• the deletion or disapplication of existing PRA rules as part of CRD IV implementation; and
• specific questions set out in individual chapters of the CP regarding proposals on pillar 2, credit risk, market risk and Large Exposures.

Response

This consultation closed on 2 October 2013.

Consultation Paper 5/13 Opens in a new window

Statement Opens in a new window