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ARTICLE · 28 NOVEMBER 2018

UK Prudential Regulator Finalizes Changes To The Leverage Ratio Rules For Ring-Fenced Banks

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On November 14, 2018, the PRA published a Policy Statement on applying the U.K. leverage ratio to systemic Ring-fenced Bodies and reflecting the Systemic Risk Buffer.

United KingdomFinance and Banking
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On November 14, 2018, the PRA published a Policy Statement on applying the U.K. leverage ratio to systemic Ring-fenced Bodies and reflecting the Systemic Risk Buffer. The SRB is one of the elements of the overall capital framework for U.K. banks and building societies. It will be applied by the PRA to individual institutions and introduced at the same time that ring-fencing comes into force in 2019. RFBs are banks that hold more than £25 billion in core deposits. They must separate their core retail banking business from their investment banking business by January 1, 2019.

The Policy Statement concerns firms in scope of the U.K. leverage ratio framework that are also SRB institutions or part of a group containing an SRB institution. The Policy Statement states that the PRA received only one response to its consultation on the proposed changes and that it is not making any changes as result of that feedback. From January 1, 2019, the new rules will:

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