On 8 December 2021, the PRA issued a statement providing an update on its approach to Pillar 2A requirements. The statement is relevant to UK banks, building societies, and PRA-designated investment firms, as well as UK financial holding companies and UK mixed financial holding companies of certain PRA-authorised firms.

In the statement the PRA refers to an announcement it made earlier this year stating that in response to the COVID-19 pandemic it was alleviating unwarranted pressure on firms by setting Pillar 2A requirements as a nominal amount, instead of a percentage of total risk weighted assets. The PRA set Pillar 2A as a nominal amount in the 2020 and 2021 Supervisory Review and Evaluation Processes (SREP), and allowed firms without a 2020 SREP to request this on a voluntary basis, subject to supervisory judgement. The PRA now believes that this regulatory measure is no longer necessary and therefore in 2022 all firms will be set Pillar 2A as a variable amount (with the exception of some fixed add-ons, such as pension risk). PRA supervisors will be in contact with firms that do not have a SREP assessment planned in 2022 to amend the requirements by end-2022.