Capital adequacy

On 24 April 2025, the Financial Conduct Authority (FCA) published a consultation paper, CP25/10, on the definition of capital for FCA investment firms.

Background

The UK Capital Requirements Regulation (UK CRR) currently forms part of assimilated UK law. However, the FCA considers many of these requirements to be unnecessarily complex

On 17 April 2025, the Prudential Regulation Authority (PRA) updated its webpage on stress testing to note that it has published two stress test scenarios for use by banks and building societies that are not participants in the Bank of England’s concurrent stress testing exercise.

The PRA explains that the scenarios are derived

On 17 April 2025, the Prudential Regulation Authority (PRA) published an update on a modification by consent of the Liquidity Coverage Ratio (CRR) Part of the PRA Rulebook in relation to third country covered bonds.

The PRA had previously, on 8 April 2025, offered a modification by consent that would allow certain third

On 11 April 2025, the Prudential Regulation Authority (PRA) announced that it was offering a modification by consent (MbC) to modify Article 11 (1)(d)(ii) of the Liquidity Coverage Ratio part of the PRA Rulebook.

The MbC allows a firm that has incorrectly applied a rule regarding third country covered bonds’ inclusion

On 10 March 2025, the Financial Conduct Authority (FCA) published the findings from its multi-firm review of liquidity risk management at wholesale trading firms.

Background

The FCA notes that, over the past few years, it has engaged with firms that had experienced instantaneous and firm-specific liquidity shocks during stress events such as