FCA consults on new prudential regime for investment funds

The Financial Conduct Authority (FCA) is consulting on changes to the UK Investment Firm Prudential Regime (IFPR) for investment firms subject to the Markets in Financial Instruments Directive (MiFID) II and aims to create a single, proportionate regime that reflects firms’ size and business. 

PRA proposes 'strong and simple' regulatory framework for smaller lenders

A proposal for a ‘strong and simple’ regulatory framework for the UK’s smaller non-systemic and domestically-focused lenders has been put forward by the Prudential Regulatory Authority (PRA), potentially marking a significant departure with the EU’s approach. 

Robin Henry

Archegos fallout raises troubling questions over bank risk controls

Credit Suisse’s removal of several senior executives, including its top risk and compliance officer, as a result of reported $4.7bn losses incurred by trades with Archegos Capital Management raises serious questions as to whether banks have learned sufficient lessons from the global financial crisis

Restoring SLR sees big US banks fret over cash deposits

Some large US banks, which have piled up very large cash deposits from their clients during the Covid-19 pandemic, have been advising corporate depositors to place their cash elsewhere such as in money market funds. 

Charlie Browne

FRTB implementation continues, but many banks still undecided over IMA

Despite the complications posed by the Covid-19 pandemic, banks are mostly pressing ahead with implementing FRTB. There are open questions over how many will use the internal models approach, however. 

Hurricane flooding

Gaps might need plugging in Basel framework to reflect climate risks

The traditional risk categories embedded in the Basel framework can be used to capture many of the potential threats to banks posed by climate change, though more work is needed to figure out where specific tweaks might be required. 

NPL collections slow in Italy while Italian banks have room to optimise their capital structures

Collections related to non-performing loans (NPLs) in Italy were running 28% below pre-pandemic levels in February and are not expected to recover anytime soon, said Scope Ratings, adding that Italian banks have significant room to optimise their capital structures.

Restrictions on shareholder payouts to end on June 30 for most banks

Temporary restrictions on bank holding companies making shareholder payouts will end for most firms on June 30, following the outcome of the upcoming stress tests, the Federal Reserve Board said in a statement on March 25. 

European Commission HQ

Pandemic highlights EU bank resolution framework weaknesses

The EU’s much-criticised bank failure rules are up for re-evaluation. Experts insist the rules are currently unworkable and change is overdue, especially as Europe is poorly prepared for a Covid-19-related banking crisis.

Fed ends SLR exemptions despite bank calls for it to be extended

A temporary change, which allowed banks to exclude holdings of US Treasuries and cash deposits at the US Federal Reserve from the supplementary leverage ratio (SLR) was allowed by regulators to expire on March 31 as scheduled despite industry calls to prolong the exemptions.