On Thursday 7 May 2020, we announced that, in response to the economic shock from Covid-19, we were alleviating unwarranted pressure on firms by setting Pillar 2A requirements as a nominal amount, instead of a percentage of total Risk Weighted Assets (RWAs).
We set Pillar 2A as a nominal amount in the 2020 and 2021 Supervisory Review and Evaluation Processes (SREPs), and allowed firms without a 2020 SREP to request this on a voluntary basis, subject to supervisory judgement.
We believe 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). Supervisors will be in contact with firms that do not have a SREP assessment planned in 2022 to amend the requirements by end-2022.
ScopeThis 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.
ImplementationAll firms currently with a nominal Pillar 2A requirement will be set a variable requirement in 2022.
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Bank of England published this content on 08 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 December 2021 10:21:01 UTC.
