The PRA has published Consultation Paper 1/15: Assessing capital adequacy under Pillar 2 (CP1/15).
The PRA has already consulted on certain changes to the Pillar 2 framework (Consultation Paper 5/13: Strengthening capital standards: implementing the CRD IV) and published final policy (Policy Statement 7/13: Strengthening capital standards: implementing the CRD IV). In CP1/15 the PRA sets out further proposals which continues the reform of Pillar 2 covering:
- Pillar 2A methodologies. The PRA outlines proposed new approaches for determining Pillar 2A capital for credit risk, operational risk, credit concentration risk and pension obligation risk. The PRA also details the proposed associated data requirements;
- how the PRA intends to operate a new buffer regime;
- how weak governance and risk management under Pillar 2 should be tackled; and
- the impact of the Pillar 2 reforms on capital disclosure and how a more transparent regime can be created.
The deadline for responding to CP1/15 is 17 April 2015.
View Assessing capital adequacy under Pillar 2 – CP1/15, 19 January 2015