imported>Doug Williamson |
imported>Doug Williamson |
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| 1. ''Banking - regulation.''
| | ''Banking - regulation.'' |
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| (P2). | | (P2B). |
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| Pillar 2 is the aspect of banking supervision which addresses firm-wide governance and risk management, among other matters. | | Pillar 2 is the aspect of banking supervision which addresses firm-wide governance and risk management, among other matters. |
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| 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.
| | Pillar 2B addresses risks to which an individual firm may become exposed over a forward-looking planning horizon, for example due to external stresses. |
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| '''''UK Pillar 2 supervisory reviews'''''
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| The UK supervisor is the Prudential Regulatory Authority (PRA).
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| There are two main areas that the PRA considers when conducting a Pillar 2 review:
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| (i) Risks to the firm which are either not captured at all, or not adequately captured, under Pillar 1 capital requirements, referred to as Pillar 2A; and
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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.
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| The assessment will generally include an Internal Capital Adequacy Assessment Process (ICAAP) and Supervisory Review and Evaluation Process (SREP).
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| '''''IRRBB'''''
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| Most regulators worldwide treat Interest Rate Risk in the Banking Book (IRRBB) as a Pillar 2 risk.
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| ---
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| 2. ''Tax - profit shifting - Global Minimum Tax - Organisation for Economic Co-operation and Development (OECD).''
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| Pillar 2 of the OECD's tax reforms agreed in 2021 provides detailed rules to implement a global minimum tax rate of 15% on large multinational enterprises.
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| :<span style="color:#4B0082">'''''Most tax territories expected to implement Pillar 2'''''</span>
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| :"Pillar 2 will require calculation of specific effective tax rates by territory: where this is below 15%, a top-up tax will arise.
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| :Where a territory does not collect this tax (for example, if it does not implement the rules), it is collected by other territories in which the group operates.
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| :Therefore, most territories are expected to implement Pillar 2, because the alternative is to give away tax revenues to others."
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| :''Graham Robinson, international tax and treasury partner PwC & Iain McDonald international tax and treasury director PwC - The Treasurer, Issue 4 2022 - December 2022, p40.''
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| == See also == | | == See also == |
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| * [[Bank supervision]]
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| * [[Base erosion and profit shifting]] (BEPS)
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| * [[Basel III]]
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| * [[Capital adequacy]]
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| * [[Corporation Tax]]
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| * [[Effective tax rate]] (ETR)
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| * [[European Union]]
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| * [[Financial reporting]]
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| * [[Global Anti-Base Erosion Rules]] (GloBE)
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| * [[Gross domestic product]] (GDP)
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| * [[Group]]
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| * [[G7]]
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| * [[Holdouts]]
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| * [[Income Inclusion Rule]] (IIR)
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| * [[Income Tax]]
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| * [[Interest Rate Risk in the Banking Book]]
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| * [[Internal Capital Adequacy Assessment Process]]
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| * [[Multinational corporation/company]]
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| * [[Nexus rule]]
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| * [[Organisation for Economic Co-operation and Development]] (OECD)
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| * [[Parent company]]
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| * [[Pillar 1]] | | * [[Pillar 1]] |
| | * [[Pillar 2]] |
| | * [[Pillar 2A]] |
| * [[Pillar 3]] | | * [[Pillar 3]] |
| * [[PRA buffer]] | | * [[PRA buffer]] |
| * [[Profit shifting]]
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| * [[Prudential Regulation Authority]] (PRA)
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| * [[Regime]]
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| * [[Risk management]]
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| * [[Sister company]]
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| * [[Stress]] | | * [[Stress]] |
| * [[Subject To Tax Rule]] (STTR)
| | * [[Supervisory Review and Evaluation Process]] (SREP) |
| * [[Supervisory Review and Evaluation Process]] (SERP) | |
| * [[Tax ]]
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| * [[Tax avoidance]]
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| * [[Tax compliance]]
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| * [[Tax evasion]]
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| * [[Tax haven]]
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| * [[Tax rate]]
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| * [[Top-up Tax]]
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| * [[Transfer pricing]]
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| * [[Undertaxed Payments Rule]] (UTPR)
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| ==External links==
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| *[https://www.oecd.org/tax/beps/tax-challenges-arising-from-the-digitalisation-of-the-economy-global-anti-base-erosion-model-rules-pillar-two.htm OECD - Tax Challenges Arising from the Digitalisation of the Economy – Global Anti-Base Erosion Model Rules (Pillar Two) - Commentary]
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| *[https://www.oecd.org/tax/beps/pillar-two-model-rules-in-a-nutshell.pdf Pillar Two rules in a nutshell - OECD]
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| [[Category:Accounting,_tax_and_regulation]] | | [[Category:Accounting,_tax_and_regulation]] |
| | [[Category:The_business_context]] |