February 28, 2020

Pillar 2A: Reconciling capital requirements and macroprudential buffers

Prudential Regulation Authority publishes CP2/20

Pillar 2A: Reconciling capital requirements and macroprudential buffers

28 February 2020
On Monday 16 December 2019, the Financial Policy Committee (FPC) raised the level of the UK countercyclical capital buffer (CCyB) rate that it expects to set in a standard risk environment from in the region of 1% to in the region of 2%. This was a structural change in the level of the CCYB in that standard risk environment, rather than in response to a change in the FPC’s view of the risk environment. In this consultation paper (CP), the Prudential Regulation Authority (PRA) proposes to update the Pillar 2A capital framework to take account of the additional resilience associated with higher macroprudential buffer requirements in a standard risk environment.

The CP is relevant to PRA-authorised UK banks, building societies and PRA-designated investment firms (‘firms’).