Pillar 2: Difference between revisions

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(ii) Risks to which the firm may become exposed over a forward-looking planning horizon - e.g. due to external stresses - referred to as Pillar 2B.
(ii) Risks to which the firm may become exposed over a forward-looking planning horizon - e.g. due to external stresses - referred to as Pillar 2B.
The assessment will generally include an Internal Capital Adequacy Assessment Process (ICAAP) and Supervisory Review and Evaluation Process (SREP).




=====IRRBB=====
=====IRRBB=====
Most regulators treat Interest Rate Risk in the Banking Book (IRRBB) as a Pillar 2 risk.
Most regulators worldwide treat Interest Rate Risk in the Banking Book (IRRBB) as a Pillar 2 risk.




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* [[Capital adequacy]]
* [[Capital adequacy]]
* [[Interest Rate Risk in the Banking Book]]
* [[Interest Rate Risk in the Banking Book]]
* [[Internal Capital Adequacy Assessment Process]]
* [[Pillar 1]]
* [[Pillar 1]]
* [[Pillar 3]]
* [[Pillar 3]]
* [[PRA buffer]]
* [[PRA buffer]]
* [[Prudential Regulation Authority]]
* [[Prudential Regulation Authority]]
* [[SREP]]
* [[Supervisory Review and Evaluation Process]]
* [[Stress]]
* [[Stress]]

Revision as of 18:07, 12 November 2016

Banking - regulation.

(P2).

Pillar 2 is the aspect of banking supervision which addresses firm-wide governance and risk management, among other matters.

Additional capital requirements may be imposed by bank supervisors under Pillar 2, depending on their evaluation of banks' internal assessments of their risks and capital requirements.


UK Pillar 2 supervisory reviews

The UK supervisor is the Prudential Regulatory Authority (PRA).

There are two main areas that the PRA considers when conducting a Pillar 2 review:

(i) Risks to the firm which are either not captured, or not fully captured, under Pillar 1 capital requirements, referred to as Pillar 2A; and

(ii) Risks to which the firm may become exposed over a forward-looking planning horizon - e.g. due to external stresses - referred to as Pillar 2B.


The assessment will generally include an Internal Capital Adequacy Assessment Process (ICAAP) and Supervisory Review and Evaluation Process (SREP).


IRRBB

Most regulators worldwide treat Interest Rate Risk in the Banking Book (IRRBB) as a Pillar 2 risk.


See also