The Prudential Regulation Authority (PRA) has published a statement today on the prioritisation of its work in light of the COVID-19 pandemic. The statement sets out further details of the Prudential Regulation Authority’s plans to help firms maintain their safety and soundness and deliver the critical functions they provide to the economy.
Accordingly, the statement sets out areas of PRA work that the Prudential Regulation Committee (PRC) and the Financial Policy Committee (FPC) have agreed to re-prioritise. The areas subject to re-prioritisation are:
- Climate change: in light of current pressures on firms, and in light of the responses to the December 2019 Discussion Paper on the Climate Biennial Exploratory Scenario, the PRC and FPC have agreed to postpone the launch of the exercise until at least mid-2021.
- LIBOR transition: as a result of Covid 19, the PRA and FCA suspended transition data reporting at the end of Q1, and cancelled some Q1 firm meetings. Owing to subsequent, the PRA and FCA have decided to resume full supervisory engagement on Libor from 1 June 2020, including data reporting at the end of Q2.
- Insurance Stress Test 2019: work on this has been paused owing to the other pressures currently experienced by affected firms.
- Stressed VAR: the PRA confirmed that it does not expect firms to update their SVAR 12-month period during the current period of financial market stress, other than if a firm’s current period no longer represents a significant period of stress for the firm’s portfolio (e.g. due to a material change in risk profile).
In addition to the areas set out above, the PRA is continuing to make other adjustments and review ongoing plans, to support firms while ensuring their safety and soundness is maintained.
To view the statement in full please click here.