On 27 July 2020, the PRA published Policy Statement 18/20 ‘Asset encumbrance’ (PS18/20).
In PS18/20 the PRA provides feedback to responses to Consultation Paper 24/19 ‘Asset encumbrance’ (CP24/19). It also contains updated versions of:
- Supervisory Statement (SS) 24/15 ‘The PRA’s approach to supervising liquidity and funding risks’.
- SS9/17 ‘Recovery planning’.
- SS20/15 ‘Supervising building societies’ treasury and lending activities’.
The PRA reports that it received two responses to CP24/19. Having considered the responses, the PRA has made the following changes to the draft policy in SS20/15:
- Paragraph 4.163 to reflect that ‘market counterparties’ does not refer to central banks.
- Paragraph 4.91 to reflect that the PRA will expect that building societies have an ‘appropriate’ forward view of collateral available; not a ‘comprehensive’ one.
The PRA considers that these changes are not significant, and remove the potential for ambiguity.
The policy presented in PS18/20 becomes effective from 27 July 2020.