Lenders may avoid uplifts to their capital add-ons after the Prudential Regulation Authority (PRA) announced a change to the calculation of Pillar 2A requirements today (May 7).
The watchdog will now set these additional charges – which are applied to cover risks not capitalised by core Pillar 1 requirements – as a fixed amount, rather than as a percentage of risk-weighted assets (RWAs), following planned supervisory reviews. Banks not due a review this year can apply to have their charge
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