The capital planning buffer (CPB) offset is a temporary adjustment to the PRA’s capital regime and is intended to ensure that the PRA’s capital framework does not unduly impact HM Treasury and Bank of England macro-prudential policy.
Since April 2013, the PRA has permitted a temporary capital offset for corporate lending which accompanies the Funding for Lending scheme. This provides Pillar 2 capital relief for net growth of eligible assets, roughly equivalent to the additional Pillar 1 capital requirements resulting from the growth of those assets.
In November 2013, the PRA extended its permission of this temporary capital offset for new net lending to private non-financial corporates and, in relation to household lending, announced that no additional relief would be available for lending completed after 31 December 2013.
The PRA has published a revised schedule and information for UK banks and building societies concerning the CPB offset. The information is intended to help banks and building societies in their calculation of the CPB offset and reporting claims for capital relief to the PRA.
View Supervisory activities – Capital planning buffers – offset, 15 May 2014