PRA buffer and Real economy: Difference between pages

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imported>Doug Williamson
(Updated)
 
imported>Doug Williamson
(Link with Real asset page.)
 
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''Capital adequacy - UK''.
The part of the total economy which excludes financial markets and financial services.


The PRA buffer is an amount of capital which UK-regulated banks are required to hold, decided as a consequence of stress testing.
The real economy is sometimes described as dealing with physical goods and 'real' or 'actual' (non-financial) services.


The amount is determined by the UK regulator, the Prudential Regulation Authority (PRA), following consultation with the regulated bank.


== See also ==
* [[Financial services]]
* [[FIRE economy]]
* [[MCT]]
* [[Real asset]]


Any PRA buffer which the regulator may set is additional to Individual Capital Guidance (ICG).
[[Category:Corporate_financial_management]]
 
 
The PRA buffer is designed to be adequate to absorb losses that may arise under a 'severe, but plausible' stress, in line with the CRD IV rules.
 
 
In addition, where the PRA assesses a firm’s risk management and governance to be significantly weak, it may also set the PRA buffer to cover the risk posed by those weaknesses until they are addressed.
 
 
The PRA buffer is sometimes known as the 'Pillar 2B' buffer.
 
The PRA buffer replaced the former 'capital planning buffer'.
 
 
== See also ==
* [[Buffer]]
* [[Capital adequacy]]
* [[CRD IV]]
* [[Governance]]
* [[Idiosyncratic stress]]
* [[Individual Capital Guidance]]
* [[Pillar 2]]
* [[Prudential Regulation Authority]]
* [[Reverse stress test]]
* [[Risk management]]
* [[Scenario analysis]]
* [[Shock]]
* [[Stress]]

Revision as of 13:19, 21 May 2017

The part of the total economy which excludes financial markets and financial services.

The real economy is sometimes described as dealing with physical goods and 'real' or 'actual' (non-financial) services.


See also