The PRA has published a letter that it has sent to firms’ finance directors notifying them of the Financial Policy Committee’s (FPC) intention to set the UK countercyclical capital buffer rate (UK CCyB rate) at 0% and for this to take effect immediately. The FPC has also recommended that the PRA reduce its buffers, as far as possible and as soon as practicable, by an amount of capital that is equivalent to the effect of a 0.5% UK CCyB rate.
The letter refers to a PRA statement on adjustments to firms’ PRA buffers and sets out the calculations that firms need to make to their notified PRA buffer. Firms should advise the PRA by 15 July 2016 of the new PRA buffer rate in force from the date of the letter.
Firms are also reminded that if they need or expect that it will use the PRA buffer, it should promptly notify the PRA in writing.
View PRA letter and statement on adjustments to firms’ notified PRA buffers, 5 July 2016