On 22 November 2018, PRA published Consultation Paper 29/18: The systemic risk buffer: updates to the Statement of Policy (CP29/18). In CP29/18 the PRA proposes minor updates to its Statement of Policy ‘The PRA’s approach to the systemic risk buffer’ (SoP). CP29/18 is relevant to ring-fenced bodies within the meaning of section 142A of the Financial Services and Markets Act 2000 and large building societies that hold more than £25 billion in deposits (where one or more of the account holders is a small business) and shares (excluding deferred shares) (jointly SRB institutions).

Specifically, the PRA proposes three changes to the SoP:

  • remove the statement that the PRA’s approach to reviewing the SoP every two years is mandated by UK legislation implementing the systemic risk buffer;
  • replace references to CP25/16 with the corresponding PRA statement of policy on its methodologies for setting Pillar 2 capital following publication of the final policy; and
  • include references to Supervisory Statement 45/15 ‘The UK leverage ratio framework’, which was recently updated with respect to the application of an additional leverage ratio buffer rate to SRB institutions.

The deadline for responses to CP29/18 is 6 December 2018.