On 7 May 2020, the Bank of England (BoE) and the PRA announced changes to resolution measures which are designed to alleviate operational burdens on PRA regulated firms in response to the COVID-19 pandemic. The BoE has also provided an update for firms on the Minimum Requirement for Own Funds and Eligible Liabilities (MREL).

The dates for the major UK banks and building societies to submit their first reports on their preparations for resolution and publicly disclose a summary of these reports have been extended by a year. These firms will now be required to submit their first reports to the PRA by October 2021 and make public disclosures by June 2022. The BoE will also make its first public statement on these firms’ resolvability by June 2022.

The compliance deadline for the BoE’s Statement of Policy on valuation capabilities to support resolvability has been extended by three months to 1 April 2021. The deadline for firms to implement the BoE’s other Statements of Policy relevant to resolvability remains 1 January 2022.

Firms will not be required to submit certain resolution pack information under PRA Supervisory Statement 19/13: Resolution Planning until the end of 2022, unless notified otherwise on an individual basis by the PRA. This is an extension to the existing delay to resolution pack submissions that had been due to expire at the end of 2020 and now applies to a wider range of firms.

2021 MRELs will reflect the PRA’s recent policy changes to Pillar 2A capital setting. The BoE also intends to exercise its discretion with respect to the transition time firms are given to meet higher MRELs. Firms not currently subject to a leverage-based capital requirement, but which subsequently become subject to one, will be given at least 36 months after that requirement takes effect to meet the higher MREL resulting from it.